'ARASiTic  Wealth 

. ,  /, .  anifesto  to  the  people 
A  the  Unitea  States .... 

By  JOHN  BROWN 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 
LOS  ANGELES 


PARASITIC  WEALTH 


OR 


MONEY  REFORM. 


A  Manifesto  to  the  People  of  the  United  States  and 
to  the  Workers  of  the  Whole  World. 


BY 


JOHN  BROWN. 


CHICAGO; 

CHARLES  H.  KERR  &  COMPANY. 

1898. 


Copyright   1897 
By  Charles  H.  Kerr  «&  Company. 


r? 


if 


Dedicated  to  the  cause  of  Social  Justice 
by  the  Author. 


1 61 7 !  9H 


PREFACE. 

As  these  pages  go  to  press,  there  comes  a  message 
of  unspeakable  sadnesss  bearing  news  of  Henry 
George's  death. 

A  great  and  good  man  has  passed  away ;  a  staunch 
and  intrepid  champion  of  the  wronged  and  oppressed 

has  laid  down  his  life  in  their  service. 

The  world  is  better  and  purer  for  the  life  of  such  a 
man,  for  as  long  as  there  are  leaders  in  our  midst  so 
fearless,  so  incorruptible,  so  outspoken,  there  is  hope 
for  moral  regeneration,  hope  for  self-government, 
hope  for  industrial  emancipation.  This  man  stood 
up  for  the  righting  of  deep-seated  wrongs  and  has 
labored  nobly  in  the  cause  of  social  justice.  Other 
shoulders  must  take  up  the  burden  where  awearied 
he  has  left  it. 

It  is  right  and  fitting  that  this  preface  be  the  eulo- 
gy of  one  whose  works  and  deeds  largely  inspired 
the  writing  of  this  book,  and  that  it  be  a  tribute  of 
respect  and  affection,  more  deeply  felt  than  duly  ex- 
pressed, to  the  memory  of  one  who  devoted  his  life 
to  the  betterment  of  mankind.  And  though  the 
views  of  social  reform  herein  set  forth  diverge  widely, 


VI  PREFACE 

in  some  respects,  from  those  held  by  Mr.  George 
— though  they  differ  in  method,  detail  and  appli- 
cation, yet  in  the  main  their  object  is  the  same — the 
setting  aright  of    grievous    and  oppressive    v^Tongs. 

It  has  been  the  writer's  duty  to  attack  a  deepl}  - 
rooted  economic  fallacy,  and  to  lay  bare  a  monstrous 
social  crime.  It  requires  a  certain  amount  of  cour- 
age to  assail  accepted  beliefs  never  before  seriously 
questioned,  but  it  requires  infinitely  more  courage  to 
abandon  old  beliefs  for  new  ones.  The  mind  warped 
by  the  prejudices  and  superstitions  of  centuries  of 
race  training  and  education,  becomes  more  or  less 
fixed  and  inflexible,  and  well-nigh  impermeable  to 
new  views  and  conceptions.  But  this  is  an  age  of 
research  and  unsparing  criticism ;  of  an  uprooting  of 
cherished  ideas  and  opinions;  of  an  unsettling  of  be- 
liefs and  convictions.  Even  the  fundamental  concepts 
of  physical  science  have  been  put  on  trial  for  bearing 
false  witness,  and  are  in  a  fair  way  to  be  convicted 
by  the  evidence.  In  the  interpretations  of  nature,  we 
now  endeavor  to  make  the  mind  fit  and  harmonize 
with  the  phenomena,  instead  of  distorting  the  facts 
of  nature  to  fit  our  mental  preconceptions  and  preju- 
dices. Antiquity  and  "respectability''  are  no  longer 
credentials  of  reliability  nor  even  of  veracity,  and 
we  contemplate  the  dogmas  of  authority  and  tradition 


prefacj:  VII. 

with  more  distrust  and  suspicion  than  with  reverence 
and  awe. 

If,  therefore,  the  views  here  advanced  do  not  ac- 
cord with  accepted  ideas,  and  run  counter  to  popular 
beliefs  and  traditions,  it  is  no  indication  that  tliey  are 
not  substantially  true. 

In  the  presentation  of  his  ideas  the  author  has  sac- 
rificed much  detail  for  the  sake  of  brevity,  leaving 
the  elaborations  arid  amplifications  for  those  more 
competent  for  the  work.  It  has  been  his  fond  ambi- 
tion to  present  a  feasible  and  practicable  scheme  of 
social  reform  which  should  guarantee  even  justice  to 
all  men,  and  whether  he  has  successfully  accom- 
plished his  task  or  not,  is  left  to  the  judgment  of  the 
reader. 


INTRODUCTION. 

A  great  social  problem  confronts  us,  pregnant  with 
man's  destiny,  and  as  old  as  history  itself.  It 
has  confronted  other  civilizations  with   visage  no  less 

sullen  and  foreboding.  It  is  the  question  of  ques- 
tions, the  paramount  issue,  beside  which  all  other 
issues  are  trifling  and  unimportant.  Upon  its  peace- 
ful solution  depends  the  very  life  and  fate  of  our  in- 
stitutions, and  it  therefore  challenges  the  thoughtful 
consideration  of  ever}'  good  citizen  who  has  the  peace 
and  welfare  of  his  country  at  heart.  The  duty  and 
responsibility  of  citizenship  seeking  the  general  good, 
is  the  writer's  only  excuse  for  publication. 

As  a  layman  trespassing  on  a  domain  of  science  of 
exceptional  difficulty  he  keenly  feels  the  responsibil- 
ity of  his  position  and  conclusions,  and  should  have 
wished  that  some  one  better  equipped  and  better  able 

had  assumed  it. 

If  the  views  here  submitted  shed  a  ray  of  hope  on 
the  miserable  lot  of  those  so  grievously  wronged  by 
existing  conditions, — if  they  contribute  in  the  least 
toward  an  orderly  and    peaceful    solution    of  a  great 


6  INTRODUCTION 

and  urgent  problem,  then  time  has  not  been 
wasted. 

It  is  of  course  too  much  to  expect  that  the  benefici- 
aries of  the  present  unjust  system  should  agree  with 
the  deductions  ;  indeed,  so  strong  is  the  force  of  habit, 
so  powerful  the  bias  of  education,  and  so  great  the 
inertia  to  change  in  accepted  ideas,  that  those 
drilled  and  schooled  in  economic  methods  hoary  and 
venerable  with  age  and  heavy  with  the  weight  of 
authority,  will  of  course  consider  it  presumptuous 
to  even  put  these  theories  to  the  test  of  criticism. 

And  even  if  prejudices  of  custom  and  training  could 
be  removed,  the  falsity  of  present  conditions  exposed, 
and  the  social  crime  of  centuries  laid  bare,  yet  as  the 
interests  of  the  socially  benefited  depend  on  the 
continuation  of  the  present  system,  we  should  hardly 
expect  this  class  to  become  elated  over  any  prospec- 
tive change. 

But  while  the  majority  of  the  socially  benefited 
will  reluctantly  agree  with  the  logical  conclusions 
even  when  convinced  of  their  truth,  there  are  some 
men  in  this  class  so  conscientious,  and  so  strong  in 
the  sense  of  honor  and  justice,  that  when  converted 
to  the  views  here  set  forth  will  not  only  cheerfully 
relinquish  the  unfair  advantage  society  gives  them 
over  their  fellow  men.  but  will  gladly  aid  the  cause 
of  justice  and  reform. 


INTRODUCTION  >] 

To  such  of  the  unselfish  and  truly  noble,  these  pages 
come  greeting,  asking  their  sympathy  and  co-opera- 
tion in  the  cause  of  humanity. 

To  rail  at  millionaires  is  a  waste  of  breath.  It  is 
not  only  useless  but  senseless.  The  millionaire  class 
neither  individually  nor  collectively  are  responsible 
for  our  social  miseries.  Like  the  tramp  and  pauper, 
the  millionaire  is  a  natural  outgrowth  of  social  per- 
versions— the  product  of  a  faulty  civilization.  It  is 
the  system  and  not  its  product  that  must  be  as- 
sailed. 

Those  whom  our  social  maladjustments  so  cruelly 
oppress  are  naturally  anxious  for  relief,  and  it  will  not 
be  difficult  to  enlist  their  sympathies  in  the  overthrow 
of  a  most  pernicious  and  unjust  social  system. 

But  the  socially  benefited  will  not  be  so  anxious 
for  a  change,  for  the  righting  of  these  wrongs  implies 
a  surrender  of  advantages  enjoyed  for  ages.  We  can 
only  appeal  to  their  sense  of  justice  and  honor,  and 
indeed  to  their  instinct  of  self-preservation,  for  society 
as  now  organized  is  built  on  a  volcano,  and  there  is 
no  safety  for  any  one  until  its  foundations  rest  on 
righteousness. 

The  rich  and  powerful  could  hasten  social  reform 
by  active  sympathy  and  co-operation.  Thev  can  also 
thwart  the  forces  of  justice  by  obstructive   measures, 


8  INTRODUCTION 

but  they  cannot  stop  them.  Whether  the  socially 
benefited  co-operate  in  the  movement  toward  social 
equity  or  not,  the  present  system  is  doomed  and  its 
overthrow  certain.  In  the  wake  of  social  regenera- 
tion and  readjustment,  follows  the  downfall  of  privi- 
lege and  despotism. 

It  is  not  the  aim  of  the  author  to  appeal  to  the 
passions  of  men,  but  to  their  reason,  and  if  in  the  heat 
of  argument,  by  metaphor  or  figure  of  speech  he  take 
the  liberties  of  counsel  pleading  the  cause  of  justice 
for  the  wronged  and  oppressed,  he  begs  to  assure  his 
readers  that  no  feelings  against  classes  or  individu- 
als have  prompted  the  writing. 

Principles  are  more  potent  than  denunciation,  and 
arguments  more  effective  than  eloquence.      It  is  upon 

these  alone  that  he  relies  for  proof  of  his  theories. 


PARASITIC  WEALTH. 


CHAPTER  I. 

That  much  social  misery  prevails  even  in  times  of 
comparative  prosperity,  no  observant  student  will  deny. 

That  the  symptoms  of  suffering  are  periodically 
aggravated  by  v^adespread  industrial  distress,  we  have 
had  nearly  five  years  of  convincing  proof,  and  the 
end  is  not  yet. 

Instinctively  people  feel  that  underlying  these  nor- 
mal and  abnormal  social  disorders  there  is  some  great 
latent  wrong,  which  if  righted  would  make  mankind 
whole. 

The  reasons  assijined  for  these  social  ills  are  as  nu- 
merous  as  the  remedies  proposed  for  their  cure.  None 
of  the  schemes,  however,  seem  to  bring  us  nearer  to 
the  practical  solution  of  the  problem,  and  the  Sphinx 
of  Fate  is  still  busy  putting  the  riddle  to  an  anxious 
and  puzzled  civilization.  Shall  we  solve  it,  or  will  it 
solve  us? 

Of  course,  if  no  organic  defect  can  be  disclosed  in 
our  present  social  system  ;  if    no    economic    condition 


lO  PARASITIC    WEALTH 

or  principle  has  been  violated,  as  would  appear  from 
our  text  books  on  Political  Science,  then  there  can  be 
no  redress  for  our  social  woes  and  we  must  be  con- 
tent to  plod  along  in  the  traditional  groove  and  make 
the  best  of  it.  If  the  nightmare  of  human  misery 
and  depravity  which  confronts  us  be  the  natural  re- 
sult of  a  well  ordered  civilization,  then  there  can  be 
no  help  for  it.  We  might  as  well  let  the  mad  rush 
go  on  unhindered,  and  if  millions  be  trampled  under 
foot  and  perish  in  the  struggle,  that  is  their  lookout ; 
we  have  the  comforting  theories  of  Political  Science 
to  fall  back  on  to  soothe  the  troubled  conscience  and 
relieve  us  of  moral  responsibility  for  the  social  havoc. 
The  social  question  is  first  of  all  a  question  of 
moral  accountability  to  ourselves.  Can  we  look  our 
crime  and  pauperism  in  the  face  and  without  reproach 

of  conscience  say  that  we  are  not  to  blame  ? 

If  on  a  fairly  honest  investigation,  we  can  establish 
a  clean  and  blanreless  record,  then  there  is  no  griev- 
ance that  reform  can  grapple  with,  and  there  can  be 
no  social  problem.  If  on  the  other  hand,  we  dis- 
cover a  fundamental  wrong  in  our  Social  Economics, 
to  which  this  misery  can  be  traced,  then  it  is  our 
moral  duty  to  at  once  set  about  removing  it,  for  fur- 
ther temporizing  with  such  an  evil  is  a  crime. 

If  our  grievances  be  real  and  the  present  social  ar- 


PARASITIC    WEALTH  I^ 

rangements  be  inadequate  to  cope  with  them,  then 
there  must  be  some  one  true  way,  apart  from  the 
present  system,  in  which  the  evil  may  be  met,  and 
this  must  be  the  common  ground  on  which  the 
present  system  and  all  other  schemes  of  social  reform 
can  agree.  There  must  be  some  economic  condition 
or  principle  on  which  all  reform  forces  may  combine 
for  the  common  good.  To  find  this  condition  or 
principle  is  the  aim  of  the  writer. 

Applying  deductively  the  test  of  ethics  to  the  social 
problem,  we  should  consider  that  system  of  society  the 
best,  which  while  conceding  to  the  individual  the 
greatest  possible  personal  freedom  consistent  with  the 
highest  welfare  of  society  as  a  w^hole,  guarantees  to 
every  member  of  the  community  an  equal  chance  in 
the  race  of  life  without  prejudice,  an  equal  opportunity 
without  favor  or  hindrance. 

The  criterion  of  Social  Equit}'  resolves  itself,there- 
fore,  simply  into  "Fair-play."  If  we  enter  the  arena 
of  life  on  equal  terms  as  regards  natural  opportuni- 
ties, then  all  the  requirements  of  social  ethics  are 
satisfied.  We  have  but  to  exert  our  faculties  and 
make  the  proper  effort,  and  rew^ard  comes  to  us  in  a 

direct  ratio  of  our  services  to  society.      Our  reward  is 

then  a  measure  of  our  effort  and  ability.  This  is  justice  ; 
more  we  cannot  ask. 


12  PARASITIC    WEALTH 

Now,  with  our  boasted  "  equal  rights  and  privileges," 
do  our  laws  and  economic  conditions  guarantee  fair- 
play  to  every  member  of  the  communit}-  whatever 
his  station  in  life  ?  Are  we  quite  sure  that  effort  and 
ability  are  rewarded  according  to  merit,  that  benefits 
reaped  are  in  proportion  to  services  rendered  ?  If  so, 
then  the  present  social  conditions  must  bear  witness 
to  such  equit}',  and  the  wealth  of  the  rich  must  be  an 
equivalent  of  prodigious  services  they  rendered  to  so- 
ciety, and  the  poverty  of  the  poor  must  be  an  indica- 
tion of  utter  incapacity.  We  judge  of  the  tree  by  its 
fruits.  If  our  economic  conditions  are  right, then  the 
distribution  of  wealth  and   income  must  be  just.      If 

not  just,  then  the  economic  conditions  cannot  be 
right. 

Let  us  for  a  moment  contemplate  the  disparities  of 
wealth  as  we  see  them,  and  take  a  mental  inventory 
of  the  comparative  commercial  and  industrial  efficiency 
of  those  who  possess  colossal  fortunes  and  those  who 
do  not. 

Reliable  statistics  could  throw  much  light  on  a 
dark  subject,  but  no  serious  investigation  has  been 
undertaken  to  map  out  the  possessions  of  the  rich  and 
poor,  and  the  figures  are  riot  available.  However, 
fairly  good  estimates  have  been  independently  made 
by  different  competent  persons  as  to  the  distribution 
of  wealth  in  tlie  United  States. 


PARASITIC    WEALTH  1 3 

Mr.  Henry  Gannett  in  his  interesting  book,  "The 
Building  of  a  Nation,"  has  been  at  some  pains  to  ob- 
tain data  for  his  estimates.  For  the  classification  of 
the  rich  he  used  Bradstreet's  book  of  ratings  and  util- 
ized the  eleventh  census  returns  as  far  as  available  in 
estimating  the  wealth  of  other  classes. 

The    distribution  of  wealth  in  percentages  of  the 

total  on  basis  of  population    percentages  appear  from 

his  abstracts  as  follows : 

60  00  per  cent,  of  the  population  own    6  per  cent,  of  total  v/ealth. 
37  24  "  "  "  "      37        "  " 

0  28         "  "  "  "      27        "  "  " 

Q    A1  ■<  <«  <•  <i  C.  II  II  (1 

On  a  basis  of  62,600  millions  of  dollars  of  pri- 
vate wealth  in  the  United  States  in  1890,  the  average 
wealth  of  these  classes  divided  among  12,690,151 
families  would  be : 


No.  of  Families. 

Wealth. 

Averages 

7,614.091 

$    3,756,000,000 

493 

4,725,812 

23,162,000,000 

4,901 

313,447 

15,650,000,000 

49.927 

35,532 

16,902,000,000 

475,684 

1.269 

3,130,000,000 

2.466,510 

12.690.151  $62,600,000,000  4.933 

To  construct  a  curve  of  "Wealth  Distribution"  from 
the  above  data  is  a  comparatively   easy   matter.     We 


14  PARASITIC    WEALTH 

may  safely  assume  that  among  the  7,614,091  families 
constituting  the  first  group,  there  will  be  every  possi- 
ble gradation  of  holdings,  from  nothing  at  the  starva- 
tion end  up  to  $986  at  the  other  end.  The  second, 
third,  fourth  and  fifth  groups,  must  without  break 
form  a  continuous  curve  from  a  possession  of  986 
dollars  up  to  wealth  amounting  probably  to  a  hundred 
millions  or  more.  Plate  I.  shows  the  development 
of  these  data  into  a  curve.  The  limits  of  the  page 
allow  us  to  reach  a  level  of  ^150,000.  Imagination 
must  supplement  the  shortcomings  of  the  page.  If 
the  limit  of  aggregated  wealth  is  one  hundred  and 
fifty  millions,  then  we  must  imagine  the  page  magni- 
fied one  thousand  times  in  order  to  vertically  represent 
this  high  level! 

The  contrast  between  the  few  enormously  rich  and 
the  many  wretchedly  poor  is  bewildering.  But  this 
disparity  might  prove  nothing  but  prodigious  capacity 
and  productive  efficiency  on  the  one  hand  and  utter 
incapacity  and  worthlessness  at  the  other,  unless  we 
can  show  that  there  is  a  bacillus  in  the  "body  social" 
producing  symptoms  of  turgescence  on  the  one  hand 
and  atrophy  on  the  other. 

According  to  Mr.  Gannett's  estimate  350,000  fami- 
lies (less  than  3  per  cent.)  own  57  per  cent,  of  the 
total  wealth,  while  12,340,000  families  own  the  bal- 
ance of  43  per  cent. 


POPULATION. 


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ZO 


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so 


ffo  /CO 


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PLAT  Ell^ 


CURVE  OF.WEALTH. 


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1 6  PARASITIC    WEALTH 

In  the  *' Political  Science  Quarterly"  for  Decem- 
ber. 1893,  Mr.  G.  K.  Holmes,  basing  his  estimates  on 
the  Eleventh  Census  returns,  starts  with  the  wage 
earning  and  farming  class,  to  obtain  holdings  of  the 
very  rich,  his  method  being  the  opposite  of  that  of 
Mr.  Gannett.  His  figures  for  this  class  when  ar- 
ranged appear  as  follows : 


Families. 

Per  Cent. 

Wealth. 

Average 

1,440,000 

11.35 

216,000,000 

150 

5,159,796 

40.66 

2,579,898,000 

500 

720,618 

5.68 

1,142,531,550 

1585 

752,760 

5.93 

1,359,741,600 

1806 

1,756,440 

13.84 

5,309,589,600 

3023 

1,764,273 

13.90 

6,749,076,593 

3825 

11,593,887  91.36  17,356,837,343 

Reducing  these  for  convenience  to  three  items,   we 
have : 


Families. 

Per  Cent. 

Wealth. 

Average 

6,599,796 

52.01 

2,795,898,000 

424 

1,473,378 

11.61 

2,502,273,150 

1698 

3,520,713 

27.74 

12,058,666,193 

3425 

11,593,887  91.36  17,356,837,343 

It  thus  appears  that  91  per  cent,  of  the  people  own 
29  per  cent,  of  the  wealth,  while  9  per  cent,  own  71 
per  cent,  of  the  wealth.  Completing  the  above  state- 
ment    with    the    celebrated    classification    of    4.047 


PARASITIC    WEALTH  1 7 

millionaires  given  by  the  New  York  Tribune,  and 
arranging  the  remaining  wealth  on  a  basis  of  progres- 
sion, the  wealth  curve  would  appear  something  like 
that  shown  on  Plate  II. 

In  his  excellent  book  "The  Present  Distribution  of 
Wealth,"  Dr.  Chas.  B.  Spahr,  b}'  an  independent 
method  of  research,  arrives  at  substantially  the  same 
results  as  Mr.  Holmes,  and  his  figures,  falling  within 
a  similar  wealth  curve,  are  valuable  as  corroborative 
evidence.  Dr.  Spahr  estimates  that  one  per  cent,  of 
the  people  own  half  of  the  wealth  of  the  country,  or 
as  much  as  the  remaining  ninety-nine. 

In  the  Forum  for  November  1889,  Mr.  Thos.  G. 
Shearman  gave  estimates  of  distribution,  based  on  the 
wealth  of  the  millionaire  class,  and  on  the  application 
of  the  known  law  of  averages  to  such  holdings,  to  ob- 
tain the  relative*  wealth  of  the  other  classes.  His  es- 
timates of  the  nation's  wealth  and  population  very 
closely  approximate  subsequent  census  returns.  Sub- 
joined figures  are  taken  from  his  article  in  the  New 
York  World  of  June  20,  1897. 

Two  tables  were  prepared ;  one  on  the  basis  of  the 
British  Income  Tax,  and  the  other  on  the  basis  of  tax 
returns  from  the  City  of  Boston.    On  the  former  basis, 
the  distribution  when  reduced  to  three  great  classes, 
is  found  to  be  as  follows : 


POPULATION 


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CURVE  OF  WEALTH 


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PARASITIC    WEALTH 


Class. 

Families. 

Wealth. 

Average. 

Rich, 

235,310 

$43,900  millions 

$186,567 

Middle 

1,200.000 

7.500 

6,250 

Working 

11,565.000 

11,175 

968 

From  this  it  would  appear,  that  less  than  two  per 
cent,  of  the  people  own  seventy  per  cent,  of  the 
wealth  of  the  United  States. 

In  the  table  on  the  basis  of  American  Tax  Re- 
turns, the  classification  is  as  follows : 


Families 

Total  Wealth. 

Average  Wealth 

70 

$  2.625  millions 

$37,500,000 

90 

1,025 

If 

11,500,000 

180 

1,440 

If 

8,000,000 

135 

968 

II 

6,800.000 

360 

1.656 

II 

4,600,000 

1755 

4.036 

tt 

2,300,000 

6000 

7.500 

If 

1,250,000 

7000 

4,550 

If 

650,000 

11000 

4,125 

ff 

375,000 

14000 

3,220 

If 

830,000 

16500 

2,722 

It 

165.000 

50000 

5,000 

II 

100,000 

75000 

4,500 

If 

60,000 

200000 

4,000 

ff 

20.000 

1000000 

3.500 

II 

8,500 

11620000 

11.215 

If 

13002090  62,082 

The  above  condensed   under  head   of   three  great 
classes  becomes: 


20  PARASITIC    WEALTH 

Families.  Total  Wealth.  Average  Wealth. 

182,090  $  43,367  millions             $238,135 

1,200,000  7,500        "                         6,250 

11,620,000  11,215        "                            968 

From  this  table  it  would  appear  that  40,000  fami- 
lies own  over  one-half,  while  one-seventieth  part  of  the 
population  (1-4/10  per  cent.)  owns  more  than  two- 
thirds  of  the  country's  wealth. 

As  the  influences  at  work  in  the  concentration  of 
wealth  in  the  United  States  are  more  potent  than 
those  in  England,  on  account  of  much  higher  rates  of 
interest,  the  estimates  on  basis  of  American  tax  re- 
turns should  be  more  reliable  than  those  on  basis  of 
British  Income  Tax.  That  these  influences  are  con- 
stantly at  work  and  the  accummulations  of  wealth  are 
becoming  greater  and  greater  there  can  hardl}'  be 
any  doubt.  It  is  probably  safe  to  say  that  250,000 
families  own  more  than  two-thirds  of  the  United 
States.  These  250,000  families  practically  dictate 
the  government  policy  of  the  nation,  control  our  legis- 
latures and  mould  public  opinion  largely  to  suit  their 
own  class  interests.  The  masses  are  mere  puppets 
in  the  hands  of  these  shrewd  manipulators — mere 
tools. to  do  the  bidding  of  masters.  A  highly  efficient 
and  influential  press  largely  in  the  service  and  control 
of  these  people,  manufactures  public  sentiment  to 
order,  and  schools  the  masses  within  the  narrow  lines 


PARASITIC    WEALTH  21 

of  political  orthodoxy  and  blind  party  allegiance. 

The  herd  is  driven  shouting  to  the  quadrennial 
round-up,  rushing  blindly  where  the  party  lash  impels 
it  into  one  political  groove  or  another.  It  cannot  go 
wrong,  for  it  doesn't  matter  much  which  wins.  The 
tariff  goes  up  or  the  tariff  goes  down,  according  to 
which  party  is  in  control :  the  work  of  the  outgoing 
administration  is  promptly  undone  and  reversed ; 
finances  are  manipulated,  tariffs  juggled,  commerce 
and  industry  upset,  and  this  is  government — the  gov- 
ernment of  the  most    enlightened    people    on    earth! 

On  Plate  III.  Mr.  Shearman's  figures  have  been  de- 
veloped into  a  curve  of  distribution.  This  curve  is 
pitched  to  a  steeper  gradient,  being  more  sudden  and 
pronounced  than  its  predecessors,  but  while  the  pitch 
varies  in  degree  in  each,  these  curves  all  show  some 
cumulative  force  or  agency  at  work  rapidly  heaping 
up  the  millions  into  the  hands  of  a  constantly  dimin- 
ishing minority,  whilst  the  vast  bulk  of  the  people 
seem  to  grow  relatively  poorer.  They  all  testify  to 
some  powerful  influence  tending  to  absorb  and  ap- 
propriate the  nation's  productive  output  and  turn  it 
over  to  swell  the  wealth  of  the  redundantly  rich. 

A  class  of  apologists  for  our  social  perversions  has 
been  coming  forward  with  hopeful  and  optimistic 
arguments,  pursuading  us,  that    after  all,  mankind  is 


POPULATION 


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PARASITIC    WEALTH  23 

doing  fairly  well ;  that  the  disparities  are  decreasing, 
and  the  immensely  rich  are  becoming  poorer ;  that  the 
middle  classes  are  looming  up,  while  the  "working 
classes"  are  better  off  than  before.  English  statis- 
tics are  quoted  to  show  the  decline  of  English  fortunes 
tracing  back  to  eras  prior  to  the  modern  industrial 
movement.  The  fact  is,  that  in  England  and  other 
old  countries  in  Europe,  there  has  been  a  decline  in 
non-productive  incomes,  due  to  gradual  decline  in 
money  premium.  Productive  effort  has  settled  down 
to  a  condition  of  industrial  and  commercial  repose. 
New  enterprises  and  undertakings  have  not  been 
seeking  the  money  function  very  eagerly,  while  money 
volume  has  been  expanding  and  its  circulation  has 
increased  by  improved  banking  methods,  thus  greatly 
reducing  competitive  demand  for  its  use.  In  this  way 
"  Capital"  yields  less  profit  than  in  countries  where 
natural  resources  are  not  yet  exploited,  inventive 
activities  are  keen  and  industrial  movement  intense, 
all  making  the  competition  for  money  eager  and 
premium  rates  high.  Land  rents  have  also  remained 
stationary  or  declined,  owing  to  the  overflow  popula- 
tion emigrating  to  new  countries,  thus  relieving  the 
pressure  of  over-population  and  checking  any  advance 
in  rents.  Thus  the  non-productive  sources  of  income 
are  not  as  active  in  accumulating  fortunes  as  on  this 
side  of  the  Atlantic. 


24  PARASITIC  WEALTH 

With  processes  and  methods  of  production  vastly 
improved,  we  should  naturally  expect  that  the  very 
lowest  stratum  of  society  would  be  affected  b}-  the 
increased  productive  efficiency.  But  while  the 
"working  classes"  have  been  benefited  in  a 
marked  degree,  aggregated  wealth  has  not  apparently 
relaxed  its  grip  on  the  sources  of  its  inordinate 
growth  and  the  disparities  do  not  seem  to  have  grown 
less.  But  even  if  it  were  proved,  that  the  differences 
are  really  growing  less,  it  would  leave  the  problem 
untouched.  Why  should  there  be  injustice  ?  While 
we  have  the  industrious  poor  with  us  always,  we  also 
have  the  idle  rich  with  us,  drawing  vast  fortunes  from 
non-productive  sources. 

In  the  "Arena"  for  March,  1896,  Mr.  Geo.  B. 
Waldron  has  made  an  attempt  to  estimate  the  income 
of  the  people  of  the  United  States  by  families,  on 
fairly  conservative  and  reasonably  reliable  lines.  By 
consolidating  the  first  two  items  of  his  classification, 
the  averages  appear  to  be  as  follows : 

Families  Average  Income 

53.26  per  cent.  393 


14.75 

10.89 

9.04 

7.12 

3.59 


735 
1,013 

1,438 
2,267 
3,950 


POPULATION  IN  EQUAL  percentage:' SUBDIVISIONS 


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26  PARASITIC  WEALTH 

Families  Average  Income 

1.10  per  cent.  8,590 

.22        "  24,600 

.03        •■  206,325 


100.00  1,075 

Plate  IV  shows  the  figures  developed  into  a  curve 
of  incomes.  As  in  the  case  of  the  curves  of  wealth, 
it  may  be  safely  assumed  that  there  will  be  all  possible 
gradations  of  income  from  zero  at  the  low  level  of 
despair  and  destitution,  up  to  an  amazing  income  of 
from  six  to  nine  millions  of  dollars  at  the  end  of 
wealth  and  affluence.  The  distribution  of  incomes  is 
based  on  a  total  productive  capacity  of  13,641  mil- 
lions of  dollars  per  year,  to  be  divided  among  12,- 
690,151  families,  each  family  consisting  of  4-93/100 
persons,  of  whom  1-8/ 10  (1.7915)  are  workers.  The 
average  income  per  family  on  this  basis  is  $1075  per 
year.  An  analysis  of  the  figures  will  show  that 
nearly  80  per  cent,  of  the  families  live  below  this 
average  income.  The  average  of  this  So  per  cent., 
in  a  diminishing  series,  must  therefore  be  just  one- 
half  of  the  general  average,  or  $537.50.  The  bal- 
ance of  the  20  per  cent,  range  from  $1075  per  year  up 
to  several  millions.  It  is  at  this  end  chiefly,  that 
bank  savings  are  accumulated.  In  1891  there  were 
4.533,217  depositors  on  the  books  of  some  1,011  sav- 


PARASITIC  WEALTH  27 

ings  banks.  Figuring  these  depositors  as  being  the 
workers,  and  assuming  that  the  savings  were  not 
pooled,  it  would  appear  on  the  basis  of  i.  7915  workers 
per  family,  that  2,530,000  had  money  deposits  in 
banks.  This  is  less  than  20  per  cent,  of  the  whole 
number  of  families.  Within  certain  limitations,  these 
deposits  doubtless  follow  the  income  curve.  We 
may  safely  assume  that  fully  two-thirds  of  these  range 
between  one  dollar  and  one  hundred  dollars  and 
average  only  fifty  dollars.  The  balance  will  range 
between  one  hundred  dollars  and  the  bank  limit.  A 
large  number  of  depositors  no  doubt  maintain  a  multi- 
plicity of  accounts  at  the  various  banks  thus  fictitiously 
swelling  the  number  of  depositors.  If  these  estimates 
are  fair,  something  like  95  per  cent,  of  the  people 
derive  very  little  or  no  benefit  whatever  from  money 
savings  as  a  non-productive  source  of  income,  and 
when  it  is  explained  that  the  money  volume  is  only 
about  one-foriieth  (1/40)  of  the  wealth  volume,  and 
that  therefore  interest  on  money  represents  only  about 
one-fortieth  (1/40)  of  the  interest  on  other  forms  of 
"Capital"  held  by  the  very  rich,  it  will  be  seen  that 
the  benefits  from  interest  on  savings  among  the  95 
percent,  of  the  people  amounts  to  practically  nothing. 
A  dollar  per  day  wage  per  worker  is  considered  a 
low   plane   of   living,  but  one  on   which  people  could 


28  PARASITIC  WEALTH 

live  in  comparative  comfort.  At  one  dollar  per  day 
for  300  working  days  in  the  year,  a  family  of  average 
number  of  workers  could  earn  $537  per  year,  or  half 
the  average  income.  According  to  the  figures  given, 
about  40  per  cent.,  or  five  million  families,  live  below 
the  dollar  level  of  comfort,  the  average  income  being 
50  cents  per  day  per  worker.  Four  millions  of  these 
live  below  the  80  cents  per  day  level  of  comfort, 
averaging  40  cents  per  day.  Three  millions  of  these 
receive  less  than  60  cents,  averaging  30  cents  per  day 
per  worker.  Two  million  live  below  the  40  cents 
per  day  level,  and  average  only  twenty  cents  per  day 
per  worker,  and  a  million  of  the  most  wretched  onl}^ 
average  10  cents  per  day  per  worker,  unless  helped 
out  by  charity.  We  may  assume  that  about  three  per 
cent,  of  the  population  is  at  all  times  more  or  less  de- 
pendent on  charity.  They  consist  of  the  superan- 
nuated, decrepid,  crippled, -and  incapable, — the  deaf, 
dumb,  blind  and  halt — the  insane,  idiotic  and  other- 
wise dependent;  380,700  families  would  embrace  this 
class.  A  liberal  estimate  might  place  the  num- 
ber at  500,000  families.  This  would  leave  4,- 
500,000  self-supporting  families  living  on  from  15 
cents  up  to  one  dollar  per  day  per  worker.  This 
level  of  "comfort"  is  based  upon  a  period  of  relative 
industrial    prosperity.      What   the  level  of  "comfort" 


PARASITIC  WEALTH  2g 

has  been  during  the  last  four  and  a  half  years  of  hard 
times,  we  can  better  imagine  than  realize. 

The  same  potent  factor  active  in  rolling  up  the 
millions  into  the  hands  of  the  few,  must  also  operate 
in  the  distribution  of  incomes.  The  curve  of  income 
shows  this  in  the  rapid  rise  of  the  level  at  the  end  of 
''affluence."  The  curve  takes  the  same  sudden  leap 
into  space.  We  can  follow  the  vertical  line  of  ex- 
aggerated income  only  up  to  the  $150,000  level.  To 
reach  six  to  nine  millions,  we  must  imagine  the  page 
increased  vertically  from  forty  to  sixty  times  to  show 
the  dizzy  height  of  wealth  aggregation.  In  the  case 
of  the  curve  of  wealth  we  imagined  the  page  verti- 
cally increased  one  thousand  times  to  show  the  150 
million  level.  These  figures  are  amazing  and  we  fail 
to  grasp  their  real  meaning.  What  are  we  to  sa}^  of 
a  system  which  produces  such  results  ? 

When  the  people  of  the  Uuited  States  fully  realize 
that  the  nation's  wealth  output  is  slowly  but  surely 
finding  its  wa}'  into  the  hands  of  a  diminishing  minority 
— that  the  possessors  of  this  wealth  are  virtually  mas- 
ters of  industrial  production — in  a  word,  the  "owners" 
of  the  domain  and  its  products,  while  the  balance  of 
mankind  is  a  kind  of  incidental  chattel  to  this  wealth 
absorbing  system  of  Political  Economy,  then  we  may 
expect  an  investigation  into  our  economic  methodn. 


30  PARASITIC  WEALTH 

We  cannot  be  industrially  enslaved  and  remain  po- 
litically free.  Great  disparities  in  power  make  kings 
and  subjects.  Democracy  and  servitude  are  incom- 
patible terms.  The  aggressions  of  wealth  are  a  m^en- 
ace  to  free  institutions  and  must  be  checked  if  we 
prize  our  liberty.  The  corrupting  influence  of  the 
money  power  permeates  societ}'  from  stem  to  core 
and  has  struck  deep  into  our  political  methods.  Be- 
hold the  government  of  a  great  people  legislating 
away  special  privileges  to  Trusts,  Combines  and 
Monopolies,  and  the  disgraceful  spectacle  of  a  hungry 
horde  of  vultures  over  the  tariff  spoils !  Truth  is 
perverted  to  maintain  this  class  in  power,  and  by  the 
most  specious  and  shallow  reasoning  the  people  are 
deluded  into  the  belief  that  embarassment  of  com- 
merce by  tariff  restrictions  will  improve  business, 
that  to  hinder  trade  is  to  encourage  it,  that  the  For- 
eigner pays  our  taxes,  that  monopoly  privileges  to 
the  few  will  enrich  the  many,  and  make  us  all  pros- 
perous ! 

What  are  we  to  think  of  these  surprising  theories, 
and  the  class  that  promulgates  them  .^  The  hand- 
writing is  on  the  wall  and  the  time  of  reckoning  with 
the  people  is  at  hand. 

No  fair  student  of  Political  Science  will  honestly 
and  conscientiously  maintain  that  the  conditions  which 


PARASITIC  WEALTH  3I 

result  in  such  enormous  disparities  of  well-being  are 
of  normal  origin.  No  fair  minded  person  will  con- 
tend that  such  conditions  can  have  the  sanction  of  jus- 
tice or  morality,  or  that  they  may  be  even  justified  on 
the  plea  of  expediency.  There  is  a  fundamental 
wrong  somewhere.  The  subject  matter  is  not  new  ; 
it  has  been  fully  treated  by  capable  and  well  equipped 
scholars.  The  grinding  injustice  of  present  conditions 
has  been  discussed  with  great  eloquence  and  ability, 
but  all  theories  and  schemes  of  reform  have  been 
dashed  and  shattered  on  the  stubborn  rock  of  Political 
Science.  Is  the  science  to  blam^  ?  No,  but  the  per- 
version of  its  factors  to  private  instead  of  public  use  is 
the  cause  of  our  social  undoing. 


CHAPTER  11. 

Before  proceeding  with  the  further  discussion  of 
the  subject,  a  few  words  of  explanation  in  regard  to 
economic  terms  and  factors  will  be  necessary  to  make 
our  meaning  clear. 

All  wealth  is  the  offspring  of  human  effort  exerted 
on  the  materials  of  the  earth.  All  human  effort, 
whether  physical  or  mental,  is  work.  If  in  deference 
to  the  terms  used  by  Political  Economists  we  call  hu- 
man effort  in  its  broad  sense  "  Labor,'' then  Wealth  is 
the  offspring  of  "  Land"  and  "  Labor. "  Only  in  its 
expanded  sense  will  the  term  ''Labor''  be   employed. 

Commerce  is  the  exchange  of  the  products  of  labor 
that  is,  of  forms  of  wealth ;  and  Industry  is  the  cre- 
ation of  new  wealth. 

Primitive  commerce  and  industry  were  conducted 
by  the  wasteful  and  unsatisfactory  method  of  barter. 
They  were  the  clumsy  inefficient  methods  of  barbar- 
ism. When  money  came  into  use,  civilization  was 
born,  and  money  became  the  third  factor  of  produc- 
tive effort.  Land,  labor  and  money  constitute  the 
economic  trinity.      The  writer  is  conscious  of  uttering 

a  most  "dangerous"  economic  "heresy"  in  proclaim- 

32 


PARASITIC  WEALTH  33 

ing  money  as  a  prime  factor  of  production;  it  marks 
his  departure  from  prevailing  opinions.  The  usual 
classification  in  our  text  books  on  Political  Science, 
is  Land.  Labor  and  Capital,  with  a  fourth  factor 
sometimes  added  as  "business  ability."  Business 
ability  being  a  form  of  human  effort,  is  simply  a  dif- 
ferential of  Labor  and  may  be  ignored.  The  word 
"Capital"  implies  two  very  separate  and  distinct 
things,  and  is  therefore  the  source  of  much  confusion 
of  thought.  "Capital,"  in  the  sense  of  v%'ealth  is  a 
product  and  not  a  factor.  It  is  the  offspring  of  Land, 
Labor  and  Mone\-.  "Capital"  when  used  in  the 
sense  of  money  is  a  true  factor  of  production  and  only 
in  that  sense  can  it  be  so  understood.  We  are  now 
concerned  with  modern  methods  of  commerce  and  in- 
dustry— the  methods  of  civilization — which  were  made 
possible  by  the  use  of  money  alone.  Money  takes  the 
place  of  concrete  wealth  in  exchange  and  production, 
and  becomes  so  efficient  a  means  of  wealth  creation, 
that  to  be  without  it  implies  a  return  to  barbarism. 
Concrete  wealth  is  a  mere  dead  product,  an  inert  tool 
requiring  human  effort  to  operate  it.  But  labor  must 
remain  idle  until  set  free  by  some  agent  or  incentive. 
That  agent  is  money.  Money  is  therefore  the  prime 
mover  of  industrial  effort,  the  initiative  of  production, 
the   indispensable  factor  of  wealth  creation.      It  is  as 


34  PARASITIC  WEALTH 

it  were  the  controlling  valve  of  Industrial  energy — 
selling  the  wheels  of  industry  in  motion.  It  is  the 
magic  switch  which  turns  on  the  electric  power  of 
human  effort.  Wealth  or  Capital,  is  the  machinery 
through  vv'hich  the  energy  set  free  b}'  the  money  func- 
tion operates  to  produce  more  wealth  ;  it  is  the  dead  tool 
of  productive  ei^ort.  All  wealth  which  conduces  to 
comfort  and  shelter,  all  improvements  which  assist 
commerce  and  industry  and  make  human  effort 
effective,  are  Capital.  They  are  the  tools  of  produc- 
tion. The  land  is  our  workshop  and  the  nation's 
wealth  the  tools,  and  upon  the  elaboration  and  exten- 
siveness  of  the  plant  depends  the  efficitncy  of  man's 
effort. 

Can  we  carry  on  the  business  of  civilization  by 
means  of  goods?  No,  it  would  reduce  us  to  the  dull, 
sluggish  methods  of  barter,  and  death  and  famine 
would  overtake  us — civilization  would  perish. 

Is  it  British  wealth  we  want  when  we  desire  to  de- 
velop our  resources  or  build  railroads?  No,  we  do 
not  need  the  wealth,  for  at  this  moment  we  are  the 
richest  nation  on  the  face  of  the  globe.  We  need  the 
money. 

Is  it  the  landed  or  personal  wealth  of  our  American 
'•  Capitalist"  we  need  to  set  going  the  wheels  of  in- 
dustry? No,  it  is  the  money  he  can  exchange  for 
these  properties.      That  and  nothing  else. 


PARASITIC  WEALTH  35 

Money  is  one  of  the  industrial  opportunities  of 
man,  and  the  most  efficient  tool  at  his  command.  So 
important  is  the  money  function  that  we  could  afford 
to  sacrifice  more  than  half  our  labor  rather  than  do 
without  it.  Indeed  so  essential  is  it,  that  for  centur- 
ies money  was  considered  the  only  true  wealth  of  a 
nation,  and  that  idea  has  survived  to  this  day  as  the 
"balance  of  trade"  fallacy — a  ver}'  excusable  error. 
Like  an  invention  of  great  utility,  money  multiplies 
the  effectiveness  of  labor  many  fold.  To  create 
wealth  without  the  aid  of  money  is  to  produce  it  un- 
der conditions  of  greatest  disadvantage.  The  money 
function  confers  on  productive  effort  an  efficiency  un- 
assisted labor  does  not  possess,  so  that  properly  speak- 
ing wealth  may  be  said  to  be  the  offspring  of  Labor 
and  the  money  function.  These  two  factors  of  pro- 
duction are  always  associated  together  and  cannot  be 
separated  without  causing  immediate  industrial  col- 
lapse. It  thus  appears  that  money  is  indispensable 
to  production,  and  if  in  any  way  it  may  be  made  arti- 
ficially scarce,  and  its  function  be  monopolized,  then 
premium  must  emerge  as  the  price  of  its  limitation. 
Such  premium,  though  pressing  heavil}-  on  produc- 
tive effort,  would  not.  if  confined  simply  to  mone\". 
affect  us  seriously,  were  it  not  that  "money  use" 
confers  on  "property  use"  the   same  prerogative  of 


36  PARASITIC  WEALTH 

premium,  and  when  we  fully  realize  that  the  wealth 
volume  capable  of  bearing  premium,  is  about  forty 
times  that  of  the  money  of  circulation,  v/e  will  better 
appreciate  the  enormous  proportions  such  a  premium 
charge  will  assume. 

As  without  the  money  function  wealth  cannot  be 
reproduced  except  under  conditions  of  greatest  dis- 
advantage, it  is  quite  natural  tiiat  if  money  bear  a 
premium,  all  wealth,  the  product  of  money's  magic 
power,  should  also  bear  a  premium.  Were  this  not 
so,  then  the  owners  of  money  would  not  part  with  it 
except  in  usury,  and  its  conversion  into  any  sort  of 
permanent  investment  would  be  undesirable,  which  is 
absurd.  It  follows,  therefore,  that  whatever  interest 
money  brings  for  its  hire,  property,  the  offspring  of 
its  function,  must  also  bring  for  its  use.  It  should  be 
noted,  that  all  wealth,  the  product  of  human  effort,  is 
perishable,  and  will  become  less  valuable  with  ad- 
vancing time.  Why  should  it  bear  interest  when  it 
has  a  depreciating  value  ?  Money,  however,  is  not 
perishable.  Honest  money  will  purchase  the  same 
equivalent  of  labor  to-da}'  that  it  will  ten  years  hence. 
Money  is  the  parent  of  modern  industr\'.  the  creator 
of  wealth.  When  money  is  at  a  premium,  its  off- 
spring, wealth,  born  under  the  adversities  of  currency 
limitations,  carries  with  it  as  the   price  of  its  parent- 


PARASITIC  WEALTH  37 

age,  similar  premium  tendencies.  Experience  shows 
that  as  premium  declines  on  money,  it  straight-way 
declines  on  its  products.  As  rent  emerges  from  the 
monopoly  of  land,  so  interest  emerges  from  the  limi- 
tation of  money. 

These  views  are  completely  at  variance  with  those 
advanced  by  economic  writers  and  will  be  referred 
to  again. 

Money  has  two  separate  and  distinct  functions.  It 
is  the  medium  of  exchange  for  commodities,  or  past 
services,  impressed  on  the  products  of  labor.  This 
is  commerce. 

It  is  also  the  agent  of  production  as  setting  labor 
free  to  produce  new  wealth.  This  is  Industry.  In 
both  cascs  it  becomes  a  measure  of  value,  of  services. 

Money  is  either  a  form  of  wealth  or  representative 
of  wealth.  In  either  case  it  is  simply  an  order  on 
society  for  services  rendered,  for  energy  usefully  ex- 
pended, giving  the  possessor  the  power  to  levy  on 
society  for  an  equivalent  in  past  or  present  services. 
It  is  a  voucher  of  human  effort  expended  productively, 
and  as  such,  it  is  a  sight  draft  on  the  products  of  in- 
dustry, or  an  order  on  the  world's  productive  effort. 
Money  should  therefore  come  to  us  merely  as  a  re- 
ward for  services  rendered.  If  it  comes  to  us  in  any 
other  way,  then  we   posses  an  order  on  society    for 


38  PARASITIC  WEALTH 

productive  effort   for  which   no  equivalent    has  been 
rendered.      Tliis  is  appropriation. 

Wages  and  profit,  or  incomes  under  any  other 
name,  vinless  they  be  the  measure  of  actual  productive 
services,  or  services  conferring  benehts,  must  be  a 
tribute  on  the  productive  efforts  of  others,  and  simpl}' 
mean  injustice — a  violation  of  the  eighth  command- 
ment. 

Money  in  its  last  analysis,  is  a  medium  for  the  ex- 
change of  services. 

"Whatever  performs  this  function,  does  this  money- 
work,  is  money,  no  matter  what  it  is  made  of."  (F. 
A.  Walker.  Political  Econom}'.) 

In  primitive  socict}'  mone\"  had  to  be  some  form  of 
wealthier  sc  in  order  to  pass  uncliallenged  as  a  me- 
dium of  final  payment.  It  took  the  forrii  of  coin  made 
of  metals  used  iov  personal  adornment.  The  money 
of  the  past  is  still  the  money  of  the  present.  An  im- 
provement was  made  in  substituting  paper  for  metal, 
and  holding  the  metal  as  a  reserve  for  its  redemption. 
This  improvement  led  to  the  abuses  of  inflation,  and 
caused  so  many  panics  and  failures,  that  the  good 
features  of  the  s}  stem  v\  ere  to  a  large  degree  counter- 
balanced. 

Excepting  that  the  so  called  "precious''  metals  are 
a  form  of    wealth    /ycr  sc.    there    has    been    no   valitl 


PARASITIC  WEALTH  39 

reason  assi<^ned  why  gold  or  silver  should  be  used  for 
money.  There  are  some  good  reasons  why  they  should 
not  be  so  used.  In  the  tirst  place. if  money  be  a  form  of 
wealth  then  to  perform  its  money  function  lliis  wealth 
must  be  withdrawn  from  its  legitimate  field  of  utility 
in  the  arts  and  industries,  and  this  is  a  waste  of  its 
value  in  use,  and  therefore  a  useless  waste  of  wealth. 

Secondly,  the  volume  of  coin  metal  is  not  controll- 
able and  the  output  is  a  constant  source  of  anxiety. 
Nothing  short  of  an  unlimited  coinage  law  will  main- 
tain these  metals  at  a  uniform  value  and  prevent  the 
fluctuations  of  demand  and  supply,  and  vmlimited 
coinage  is  not  without  grave  dangers  as  will  appear 
later. 

Thirdly,  an  unlimited  coinage  law  arbitrarily  fixes 
a  price  on  these  money  metals  and  confers  a  fictitious 
value  upon  them  far  in  excess  of  cost  of  production 
for  industrial  purposes  alone,  thus  further  contribut- 
ing  to  a  waste  of  wealth. 

The  coinage  law  is  simply  a  form  of  "'protection'' 
for  a  hoary  headed  ''infant  industry" — gold  mining. 
Demonetize  gold  universally,  and  down  goes  the 
price  of  this  privileged  metal  probably  two-thirds  of 
its  artificial  value.  So  thoroughly,  however,  are 
financiers  and  writers  on  Political  Science  committed 
to  a  metal   basis,  that   doubtless  any  project  of  reform 


40  PARASITIC  WEALTH 

will  be  met  in  a  spirit  of  intolerance  and  be  opposed 
with  stubborn  resistance.  And  yet  our  financial  sys- 
tem is  the  survival  of  a  primitive  civilization  and  is 
entirely  inadequate  to  the  growing  needs  of  a  high 
social  development.  The  shortcomings  are  so  glar- 
ing and  the  social  disasters  caused  by  present  methods 
so  wide-spread,  that  it  should  be  superllous  to  point 
them  out.  All  our  panics  and  hard  times  are  directly 
traceable  to  financial  derangements,  mainly  due  to 
efforts  at  inflation  or  expansion  of  a  limited  and  in- 
adequate money  volume.  Our  business  depressions 
invariably  originate  in  a  money  panic.  Antecedent 
periods  of  similar  business  collapse  recurring  ap- 
parently at  regular  inter\als,  strengthen  the  general 
idea  that  such  hard  times  are  to  be  expected,  and  this 
adds  to  the  feeling  of  insecurity  and  helpless  resigna- 
tion. An  epidemic  of  fear  and  apprehension  seizes 
the  popular  m,ind  and  all  prepare  for  the  worst.  En- 
forced idleness  stares  millions  in  the  face  and  re- 
trenchment begins  its  fatal  work.  Demand  for  lux- 
uries decreases  and  producers  of  these  are  laid  off 
first.  Loss  of  waives  of  the  idle  further  reduces  con- 
sumption  of  Ihe  less  urgent  articles  and  more  pro- 
ducers are  thrown  out  of  work.  These  again  lessen 
the  demand  for  products,  and  so  the  hard  times 
cumulatively  become  harder,  until  the  rock  bottom  of 


PARASITIC  WEALTH  4 1 

social  misery  and  distress  has  been  reached.  The 
descent  to  adversity  is  slow  and  deliberate.  The 
vast  and  ponderous  machinery  of  industrial  produc- 
tion gradually  slows  down ;  to  overcome  the  inertia 
of  its  great  mass  and  momentum  requires  much  time. 
The  ascent  to  prosperity  is  no  less  slow ;  it  requires 
fully  as  much  time  to  start  the  ponderous  machinery 
going  again.  The  cycle  is  usually  completed  in  four 
or  five  years  according  to  circumstances,  in  wliich 
legislative  interferences  with  trade  must  figure  very 
largely. 

Neither  over-production  nor  under-consumption  had 
anything  to  do  with  our  business  paralysis.  The 
wheels  of  industry  stopped  in  the  midst  of  compara- 
tive prosperity  without  apparent  cause.  It  originated 
in  a  distrust  of  our  financial  integrity  and  the  tendency 
of  gold  to  go  to  a  premium.  This  precipitated  a 
money  panic  causing  financial  stringency  and  under- 
mining confidence  in  business.  Fear  and  apprehen- 
sion did  the  rest.  There  may  have  been  no  immedi- 
ate occasion  for  the  disastrous  stoppage,  a  mere  rumor 
may  have  started  the  financial  scare,  but  once  started 
we  lacked  the  resources  to  check  it.  and  like  a  fren- 
zied panic-stricken  crowd  at  the  false  alarm  of  fire, 
we  rushed  pell-mell  to  destruction  leaving  wreck  and 
ruin  in  our  wake. 


42  PARASITIC  WEALTH 

What  has  the  panic  cost  us? 

The  following  figures  of  Bank  Clearances  of  the 
United  States  are  taken  from  the  Bureau  of  Statistics, 
Treas.  Dept.  Abstract  for  1896.  The  population  es- 
timates come  from  U.  S.  Treas.  Dept.  Circular  No. 
123.  In  order  to  eliminate  the  disturbing  influence 
of  the  panic  year,  we  are  justified  in  leaving  it  out  of 
our  comparisons.  We  shall  therefore  compare  figures 
for  the  three  years  prior  to  the  panic  3ear  and  the 
three  years  subsequent  to  the  panic  year.  This 
should  give  us  a  very  fair  and  reliable  comparison. 

Years  Bank  Clearances  Population  Per  Capita 

62,622,250 
63,975,000 
65,520,000 


1890 
1891 
1892 

$58,845,279,505 
57,298,737,938 
60,883.572,4.38 

Average 

1894 
1895 
1896 

S.59,009,196,627 

$4.5,028,496,746 
50,975,155,046 
51,977.799,114 

Average 

$49,.327, 1,50,302 

64,039,083  $921.43 

68,397,000 
69,878,000 
71, .390.000 


69,888,333  §705.80 

Decrease  per  capita  since  the  panic  $215.65  or  23.4 
per  cent.  According  to  this  showing,  the  countr\''s 
bnsiness  has  fallen  off  23.4  per  cent,  since  the  panic 
of  1893.  Unfortunately  these  figures  are  misleading 
and  cannot  be  accepted  without  important  qualifica- 
tions which  in  themselves  would  introduce  an  error. 
Prior  to  May.  1892,  the  Nev/  York   Bank  Clenrances 


PARASITIC  WEALTH  43 

contained  the  share  sales  of  the  Stock  Exchange, 
which  very  U^rGfelv  swelled  the  returns.  Since  the 
establishment  of  the  Stock  Exchange  Clearing  House 
at  that  date,  most  of  the  sales  have  been  cleared 
through  the  latter  institution  and  have  ceased  to 
figure  in  the  returns  of  Bank  Clearances.  It  thus 
becomes  clear  that  unless  these  share  sales  be 
eliminated  from  the  Bank  Clearings,  we  cannot  ex- 
pect to  make  a  fair  comparison  between  the  volume 
of  business  prior  and  subsequent  to  the  panic  3'ear. 
The  correct  amount  of  these  stock  sales  is  however 
not  available  and  estimates  would  land  us  into  doubt. 
Fortunately  there  is  a  way  out  of  the  difficulty.  We 
can  compare  Bank  Clearings  of  the  nation  outside  of 
New  York  City.  The  following  Bank  Clearance 
figures  are  taken  from  the  Commercial  and  Financial 
Chronicle,  for  January  1897,  and  are  for  clearances 
outside  of  New  York  City. 
Years  Bank  Clearances  Population  Per  Capita 

1890  $23,165,332,888      62,622,250 

1891  22,987,037,805       63,975.000 

1892  25,348.638,020      65,520,000 


Average 

$23,833,669,571 

64,039,083 

1894 
1S95 
1896 

$21,188,928,055 
23,440,735.558 
22,304,476,717 

68.397,000 
09,878,000 
71,390,000 

$372.17 


Average  $22,311,380,110  69,888,333  319.24 


Decrease  per  capita  since  the  panic $52.93 

or  14.22  per  cent,  (about  1/7), 


44  PARASITIC  WEALTH 

If  these  returns  may  be  taken  as  a  fair  criterion  of 
the  country's  business,  and  there  seems  to  be  no  good 
reason  to  the  contrary,  then  it  would  appear  that  the 
country  has  sustained  a  loss  of  one-seventh  of  its 
legitimate  business  since  the  mone}'  panic  of  1893. 

Can  we  realize  what  this  loss  means?  There  were 
employed  in  gainful  occupations  in  1890,  according 
to  census  returns,  22,735,661  persons  which  is  36.306 
per  cent,  of  the  population.  Applj-ing  this  percent- 
age to  the  average  population  for  1894-95-96,  there 
should  have  been  employed  in  gainful  occupations 
during  that  period  an  average  of  25,411,398  persons. 
On  the  basis  of  loss  to  business  which  Bank  Clear- 
ances reveal  to  us,  3,613,500  workers  must  have 
been  thrown  out  of  employment  by  virtue  of  the  busi- 
ness collapse.  This  enforced  idleness  was  doubtless 
distributed  more  or  less  over  the  whole  field  of  occu- 
pations, among  nine-tenths  of  the  people,  leaving  less 
workers  in  absolute  idleness,  but  more  of  them  on  the 
margin  of  a  precarious  subsistance.  Mr.  Geo.  B. 
Waldron,  whom  we  have  already  quoted,  estimates 
the  value  of  the  nation's  products  for  1890  at  13.641 
millions  of  dollars.  The  average  advance  in  popula- 
tion for  the  years  1894-5  and  6  as  compared  with 
population  in  1890.  is  about  12  per  cent.  On  the 
basis  of  this  average  increase,  the  nation's  productive 


PARASITIC  WEALTH 


45 


output  would  have  reached  the  sum  of  15,275  mil- 
lions. Assuming  this  to  be  a  conservative  estimate, 
we  have  lost  yearly  through  enforced  idleness  the 
sum  of  2,170  millions  of  dollars,  which  is  a  sum 
nearly  equal  to  the  entire  money  volume  of  the 
United  States.  On  this  basis,  during  the  four  years 
of  business  depression  ending  June,  1897,  we  have 
lost  in  actual  production  a  sum  more  than  three  times 
as  great  as  the  cost  of  our  civil  war.  The  value  thus 
lost,  would  duplicate  and  equip  all  the  railroads  in 
the  Union.  This  is  the  price  we  paid  for  a  depre- 
ciated and  inflated  currency.  The  figures  are  not  at 
all  fanciful ;  they  are  painfully  real  and  quite  within 
the  truth. 

Could  this  national  disaster  have  been  avoided? 
Most  assuredly,  yes.  Our  financial  policy  however, 
has  lacked  the  resourcefulness  of  courage,  self- 
reliance  and  independence.  It  bears  the  shop  marks 
of  incompetency  and  subserviency  to  foreign  method? 
and  influence.  Perhaps  the  most  ruinous  piece  of 
legislation  ever  perpetrated  on  a  long  suffering  and 
patient  people  was  that  which  discredited  our  United 
States  notes,  known  as  the  Greenback  issue,  by  not 
making  them,  receivable  for  customs.  This  ill-ad- 
vised measure  surrendered  the  people  into  the  hands 
of  u.surers.  and  caused  all  our  financial  troubles  since 


46  PARASITIC  WEALTH 

that  time.  The  nation  owned  in  public  lands  and 
buildings  several  timss  the  value  of  thv^se  obligations. 
and  why  it  could  not  have  pledged  its  credit  and  good 
faith  for  their  redemption,  is  a  marvel  to  man.  By 
making  these  legal  tenders  a  niDney  of  final  payment 
with  a  stipulation  for  their  gradual  redemption  and 
retirement  within  specified  periods,  they  would  have 
circulated  on  par  with  the  best  money  in  the  world. 

The  demonetization  of  silver  was  another  blunder 
which  contributed  to  our  financial  undoin"-.  With  a 
fairly  good  influx  of  gold  and  silver  coin  under  an 
unlimited  coinage  law,  the  gretn-backs  could  have 
been  retired  without  causing  any  apparent  hardship, 
and  we  should  have  had  at  Icasi  a  reliable  currency, 
though  not  a  desirable  S3'stem  of  money.  Of  course 
ultimate  disaster  miust  overtake  the  metal  basis,  for  at 
best  it  is  a  temporary  expedient,  but  in  the  mean- 
while the  country  would  have  been  saved  incalculable 
loss,  and  in  spite  of  the  growing  disparities  between 
the  rich  and  the  poor,  a  tide  of  unexampled  prosperity 
would  have  swept  the  nation  recklessly  onward, 
drowning  in  the  din  and  roar  of  industrial  activity 
the  warning  voice  of  the  reformer.  The  quondam 
millionaires,  having  burst  their  chrysalis  of  poverty, 
would  now  emerge  as  billionaires  not  aspiring  for 
commonplace   titles,    but    for   real   kingdoms.      Thus 


PARASITIC  WEALTH  47 

social  reforms  might  have  been  successfully  warded 
off  for  an  indefinite  time.  Our  business  collapse,  and 
the  terrible  suffering  and  havoc  it  caused  could  have 
been  averted  in  due  time  b}-  a  judicious  use  of  the 
aggregated  wealth  of  these  millionaires,  for  it  was 
only  necessary  to  turn  some  of  the  redundant  wealth 
into  industrial  channels  to  inspire  confidence  in  busi- 
ness and  tide  over  the  dangers  of  retrenchment,  but 
they  did  not  come  to  the  rescue  and  their  class  in- 
terests have  sustained  irreparable  damage  in  conse- 
quence. The  wide-spread  suffering  of  the  masses  has 
called  attention  to  the  crying  economic  evils  and 
hastened  the  day  of  industrial  emancipation. 


CHAPTER  III. 

One  of  the  most  surprising  things  about  our  monev 
system,  is  the  absurdly  small  ratio  of  money  volume 
to  wealth  volume.  The  amount  of  money  in  actual 
circulation  in  1890,  according  to  Treasury  Depart- 
ment Circular  No.  123  was  $1,429,251,270,  while 
the  wealth  of  the  nation  exclusive  of  coin  and  bullion 
was  '1^63,878,316,247,  thus  showing  the  money  volume 
to  be  less  than  2-1/4  per  cent  of  the  wealth  volume. 
That  is  to  333%  if  all  the  money  in  the  land  could  be 
taken  out  of  circulation  and  made  available  for  im- 
mediate use,  it  could  purchase  less  than  2-1/4  per 
cent,  of  the  permanent  wealth  of  the  country ;  or  in 
other  words,  if  all  this  money  were  available,  it  might 
be  possible  to  convert  2-1/4  per  cent,  of  the  nation's 
wealth  into  cash,  and  no  more. 

Fig  2  Plate  V  shows  diagramatically  the  ratio  of 
money  volume  to  wealth  volume.  As  nearly  the 
whole  volume  of  available  currency  must  be  in  per- 
petual flux  and  movement  to  satisfy  the  demands  of 
commerce  and  industry,  it  is  plain,  that  under  the 
present  svstem  money  cannot  be  the  permanent  re- 
pository of  savings,    except   in  a   limited   way.      The 

48 


PARASITIC  WEALTH 


49 


present  repository  of  permanent  savings  is  land,  and 
improvements  on  land,  and  the  money  is  simply  used 
as  an  instrument  of  investment  in  these  properties. 
In  other  words,  we  have  no  capitalists  in  the  sense  of 
"moneyed  men."  They  are  simply  "propertied  men" 
who  can  convert  their  property  into  a  part  of  the  avail- 
able but  limited  stock  of  money.  This  is  an  important 
point  to  bear  in  mind,  and  we  shall  have  occasion  to 
refer  to  it  later. 

If  we  take  the  amount  of  Bank  Clearances  for 
1890,  and  divide  the  same  by  the  population  of  that 
year,  we  obtain  the  money  movement  per  capita. 
The  result  is  $940.  If  now  we  divide  this  sum  by 
the  per  capita  circulation  of  that  year  (22.82),  we  ob- 
tain 41  as  the  number  of  times  every  available  dollar 
in  the  country  functioned  in  the  Clearing  House 
either  directly  or  indirectly.  In  other  words,  although 
only  a  small  percentage  of  this  money  really  passed 
from  hand  to  hand,  the  dollars  were  in  evidence 
forty-one  times,  or  actually  figured  in  fortv-one  tran- 
sactions. But  the  Clearing  House  is  not  the  medium 
of  all  business  transactions.  There  are  the  dealings 
between  employers  and  employes,  between  the  people 
and  the  retailers,  between  the  retailers  and  the  whole- 
salers, between  the  people  and  the  banks  and  all 
minor  transactions   not  requiring  credit  paper,  which 


50  PARASITIC  WEALTH 

would  very  considerably  increase  the  actual  niovcnicnt 
of  money.  There  are  also  the  Stock  Exchange  tran- 
sactions which  have  not  been  included.  Probably  a 
velocity  of  75  times  per  year  per  dollar  w'ould  fairly 
represent  its  working  energy.  Truly  a  wonderful 
activity — would  that  labor  were  in  such  great  de- 
mand. 

If  we  wish  to  drive  a  large  quantity  of  watr  through 
a  small  pipe  we  apply  pressure  to  give  it  velocity. 
If  we  desire  to  force  a  large  quantity  of  electricity 
through  a  conductor  of  certain  resistance,  w^e  increase 
the  potential  of  the  circuit.  How  can  we  carry  on  a 
large  volume  of  business  with  a  small  volume  of 
money?  By  increasing  the  velocity  of  its  circu- 
lation. Credit  paper  and  the  clearing  house  are  the 
instruments  of  propulsion  or  the  money  potential. 
The  dollar  must  be  in  evidence  in  all  these  transact- 
ions, it  must  be  available,  but  its  circulation  is  done 
by  proxy  through  credit  paper  by  a  method  of  debt 
cancellation.  It  is  a  system  of  swapping  accounts 
where  only  a  limited  amount  of  currency  actually 
changes  hands.  It  is  estimated  that  the  dollar  need 
circulate  less  than  ten  times  to  do  one  hundred  dollars 
worth  of  money  work,  and  some  people  have  inferred 
that  we  may  eventually  dispense  with  money  alto- 
gether.     We  might  as  well  speak  of  dispensing    with 


PARASITIC  WEALTH  5  I 

pipes  and  conduits  to  carry  water,  or  conductors  to 
convey  electricity. as  to  speak  of  dispensing  with  money 
to  carry  on  business. 

In  the  Clearing  House  methods  the  limit  of  money 
propulsion  has  been  practically  reached,  and  we  may 
expect  but  little  if  any  further  improvement  in  the  veloc- 
ity of  its  circulation.  But  we  are  constantly  reminded 
by  economic  writers  that  the  present  money  volume 
is  ample  to  do  the  business  of  the  country,  that  we 
need  onl}'  our  distributive  share,  to  successfully  carry 
on  business  and  industry.  The  laws  of  demand  and 
supply  are  cited  to  show  that  increase  in  volume  will 
depreciate  the  value  of  an  expanded  money,  or  in 
other  words  that  prices  will  advance  as  money  volume 
expands.  That  decn  ased  interest  on  an  expanded 
currency  is  onl}'  apparent,  and  merely  indicates  a  dif- 
fused premium  on  a  diluted  currency. 

These  are  astonishing  theories.  It  is  argued  that 
as  "price  is  the  ratio  between  two  items,  money  and 
commodities,"  therefore  an  expanded  money  must 
raise  prices.  ''Money — what  it  shall  be  worth  will 
"depend,  demand  being  fixed,  upon  the  supply.  The 
"cost  of  production  of  money  will  influence  its  value 
"only  as  it  affects  that  supply."  (Francis  A.  Walker, 
Quar.  Jn'l.  Economics,  vol.  8,  page  64.)  This  is 
virtually  the  "Quantity  Theory"  of  money. 


52  PARASITIC    WEALTH 

Inthejnl.  of  Pol.  Econ.  for  March  1895,  Dr.  S. 
McLean  Hardy  examines  this  theory  by  the  induc- 
tive method.  Miss  Hardy  cites  statistics  of  money 
vokime.  clearing  house  returns  and  average  prices  of 
staple  commodities  in  the  United  States  from  i860 
to  i8g2  inclusive,  and  finds,  that  while  money  volume 
and  clearing  house  transactions  have  increased  very 
largely  since  i860,  prices  have  not  risen,  but  actual- 
ly fallen  eight  per  cent. 

Using  Miss  Hardy's  figures,  to  obtain  per  capita 
circulation  and  clearances,  the  results  are  as  fol- 
lows: 

PER  CAPITA  CIRCULATION   AND  CLEARANCES. 

Date.        Circulation.        Per  Cent.  Clearances.         Per  Cent. 

1860  $  13  85  100  $230  ICO 

1R92  24.44  176  554  241 

Multiphi ng  the  circulation  into  the  velocity  of  its 
movement  as  shown  in  the  clearing  house  transactions, 
we  have : 

1.76  X  2.41=4.2416,  or  in  round  numbers  4.  It 
thus  appears,  that  money  movement  per  capita  was 
four  times  as  great  in  1892  as  in  i860;  or  on  the 
basis  of  its  "clearance"  movement  in  i860  the  money 
volume  was  in  effect  four  times  as  great  in  1892  as 
in  i860.  Therefore  to  satisfy  the  requirements  of 
the  "quantity  theory"  of  money,  prices  in  1892  should 


PARASITIC  WEALTH  53 

have  been  four  times  as  high  as  in  i860,  instead  of 
which  prices  declined  eight  per  cent.  The  refutation 
of  the  theory  is  complete,  and  humanity  owes 
Miss  Hardy  a  vote  of  thanks.  It  should  be  particu- 
larly noted  also  in  this  connection,  that  while  bank 
rates  of  interest  have  very  materially  declined  since 
i860  on  an  increasing  circulation,  they  have  not 
fallen  on  a  diluted  currency,  contrary  to  accepted 
ideas. 

But  why  should  an  inductive  test  have  become  nec- 
essar}'  to  disprove  this  theory  ?  That  price  is  the 
ratio  between  money  and  commodities  is  relatively 
quite  true,  but  it  does  not  follow  that  the  value  of 
money  is  affected  thereby,  for  its  value  is  fixed  by 
coinage  law  and  is  therefore  a  constant.  Money  as  an 
exchange  medium,  is  convertible  at  sight  into  any  and 
all  forms  of  commodities,  or  services.  It  is  not  onh' 
a  standard  of  present  value,  but  of  deferred  payments 
and  purchases,  and  therefore  equally  potent  for  pres- 
ent as  for  future  varied  wants  and  requirements. 
These  qualilications.  together  with  its  imperishabilil}'. 
have  made  monev  the  chief  object  of  human  desire 
and  ambition.  It  thus  became  the  one  article  of  ulti- 
mate, constant,  and  unlimited  demand,  and  the  ordi- 
nary rules  of  exchange  cannot  be  said  to  apply  to  it 
in  the  sense  they  apply  to  goods.       Goods  are  eager, 


54  i'ARASITIC  WEALTH 

money  reluctant  in  exchanges.  Goods  are  variable, 
money  constant  in  value.  Goods  are  competitive  and 
money  non-competitive  under  normal  conditions.  Ail 
commodities  eagerly  seek  conversion  into  cash,  antl 
tend  to  overtake  its  available  volume.  Nothing  short 
of  the  limit  of  actual  cost  of  production  stops  them  in 
their  mad  competition  for  money  conversion,  and  thus 
the  cost  of  "goods  production"  constantly  approxi- 
mates, through  the  laws  of  exchange,  the  cost  of 
''money  production";  the  cost  of  "money  production" 
being  the  "value  constant."  The  demand  for  goods 
is  limited,  and  their  value  depends  upon  the  tempo- 
rary supply  meeting  the  temporary  demand,  but  this 
law  functions  independently  of,  and  entirely  outside 
of  money  as  a  factor  in  their  exchange. 

Money  as  a  factor  of  production,  when  industries 
and  undertakings  compete  for  its  use,  may  become 
subject  to  the  laws  of  supply  and  demand,  but  that  it 
is  subject  to  fluctuations  of  value  i,n  effecting  exchanges 
of  commodities,  is  un^^  arranted  in  fact  or  thcor\'  and 
a  baseless  assumption.  Money  is  a  value  constant 
and  therefore  non-competitive,  and  how  an  expansion 
of  its  volume  b}'  legitimate  means,  should  affect  its 
value  is  dillicult  to  undertand. 

The  error  of  the  "Quantity  Theory"  is  that  it 
makes  of  money   a  sort   of  llnancial  '-Dr.  Jek}ii    and 


PARASifiC  'nVKALTH  55 

Mr.  Hyde, "'one  day  performing  its  legitimate  function 
as  a  respectable  medium  of  exxhange.  and  the  next 
prowling  and  skulking  about  as  a  depraved,  degraded 
commodity.  No  doubt  our  clumsv  and  barbaric  S}'3- 
tem  of  metal  currency  and  bullion  is  responsible  for 
the  confusion,  but  it  must  be  remembered  that  when 
coin  or  bvdlion  is  used  as  money,  it  ceases  to  be  a 
commodity,  and  when  used  as  a  commodity,  it  is  no 
longer  a  monc}'.      It  cannot  be  both  at  the  same  time. 

If  a  money  possess  any  virtue  at  all,  it  must  be  that 
of  absolute  permanence  and  stability  of  value.  Lack- 
ing these  qualifications,  money  becomes  a  treacherous 
and  unreliable  medium,  and  cannot  function  as  a  true 
standard  of  value.  What  gives  our  currency  uni- 
formitv  of  value?  Assuredly  nothing  but  the  coinage 
law. 

Assuming  an  unlimited  coinage  law,  we  have  two 
separate  and  distinct  markets  for  gold ;  a  natural  mar- 
ket, where  the  metal  is  used  in  the  arts  and  industries 
as  a  commodit}-,  and  an  artificial  market,  where  the 
metal  is  used  in  the  mints  for  money. 

The  mint  receives  gold  for  coinage  at  a  fixed  rate 
of  say,  eighteen  gold  dollars  per  ounce.  As  long  as 
gold  obtains  more  than  eighteen  dollars  per  ounce  in 
the  natural  market,  it  will  not  go  to  the  mint  for  coin- 
age ;  but  when  the  natural  market  is  glutted  and  bids 


56  PARASITIC  WEALTH 

less  than  eighteen  dollars  per  ounce,  then  the  metal 
goes  to  the  mint.  With  an  eager  natural  market, 
gold  coins  have  a  natural  tendency  to  go  to  the  melt- 
ing pot,  but  with  a  surfeited  natural  market,  trinkets 
have  a  tendency  to  go  to  the  mint.  Thus  the  value 
of  the  23.22  grains  of  gold  in  the  dollar  is  automati- 
cally and  very  satisfactorily  regulated  and  maintained 
as  between  these  two  markets.  The  dollar  can 
never  go  below  its  coinage  value.  The  theory  of  de- 
preciation as  following  legitimate  expansion,  contem- 
plates, therefore,  that  although  the  market  is  equal- 
ized and  normal,  and  gold  just  as  scarce  as  before 
expansion,  it  has  in  some  way  become  depreciated  as 
compared  with  other  commodities,  and  its  purchasing- 
power  has  become  impaired !  The  falsity  of  this  rea- 
soning is  apparent,  and  should  require  no  refutation, 
and  yet  upon  such  reasoning  the  ethics  of  usury  have 
indirectly  rested  for  centuries. 

Although  the  natural  and  coinage  markets  auto- 
matically maintain  gold  at  a  normal  and  uniform 
value,  yet  this  value  is  largely  Hat  and  fictitious  when 
considered  simplv  in  relation  to  the  natural  market. 
We  iiave  seen  that  since  its  demonetization,  silver  has 
steadily  declined  in  value  until  the  metal  in  our 
Standard  Silver  Dollar  is  to-day  worth  less  than  40 
cents.      But   silver  has  not   yet   touched   bottom.      It 


PARASITIC    WEALTH  57 

has  not  yet  been  universally  discarded,  is  still  used  as 
token  money  and  lives  in  the  hopes  of  rehabilitation 
with  its  former  coinage  privileges.  Remove  these 
sustaining  hopes  of  recovered  prestige,  and  the  nat- 
ural market  will  then  appraise  its  value  at  its  true 
worth.  We  may  see  it  sold  for  30  cents  per  ounce  if 
not  less.  Restore  its  unlimited  coinage  privileges  by 
an  international  coinage  law,  and  what  will  be  the 
result?  Silver  will  go  to  par  with  gold  at  once  at 
any  arbitrary  ratio ;  providing  that  the  law  is  guaran- 
teed unassailable  permanence  and  stability.  Make  the 
ratio  15  to  I  and  immediately  thousands  of  worthless 
holes  in  the  ground  will  become  valuable,  and  the 
owners  of  mines  profitably  worked  before  re-mone- 
tization  will  become  enormously  rich ;  we  shall  reap  a 
fresh  crop  of  millionaires  and  multi-millionaires,  and 
all  for  what  ?  To  dig  up  a  lot  of  useless  metal  and 
convert  it  into  money  of  fiat  value. 

But  how  about  gold?  It  is  the  same.  Even  at  the 
rate  of  16  to  i  gold  is  probably  worse  puffed  up  than 
silver.  The  methods  of  gold  extraction  have  been 
vastly  improved  within  the  last  twenty-five  years.  Be- 
fore me  is  a  statement  from  an  expert  miner  who  has 
spent  his  lifetime  in  gold  and  silver  mining,  and  who  is 
the  owner  of  valuable  patents  for  treating  gold  and 
silver  ores.      He  claims  that,  speaking   in   a  general 


58  PARASITIC    WEALTH 

way,  ores  carrying  less  than  twenty  dollars'  worth  of 
gold  per  ton  were  unprofitable  to  mine  twenty  years 
ago.  That  ten  years  later,  ores  carrying  half  that  amount 
could  be  profitably  worked,  and  that  now  gold  can  be 
profitably  extracted  from  ores  carr3'ing  five  dollars 
per  ton,  and  as  low  as  two  and  a  half  dollars  per  ton 
in  an  exceptional  case. 

Now,  here  is  a  decline  in  the  margin  of  cultivation 
from  superior  to  inferior  soils  of  ''four  to  one"  in 
twenty  years,  and  while  these  improved  processes 
may  not  be  generally  available  for  all  kinds  of  ores, 
the  fact  remains  that  the  methods  of  extraction  have 
been  greatly  cheapened,  and  that  these  cheapening 
processes  have  enabled  us  to  work  inferior  mines 
'  profitably.  It  therefore  must  cost  a  great  deal  less  to 
mine  gold  now  than  formerly  from  equally  rich 
mines.  Only  by  virtue  of  the  coinage  law  has  it  been 
possible  to  maintain  gold  at  a  uniform  value  during 
all  these  years.  The  improved  methods  of  ore  treat- 
ment have  simply  crowded  down  the  margin  of  culti- 
vation to  inferior  mines,  where  now  it  costs  as  much 
to  mine  gold  by  superior  methods,  as  it  used  to  cost 
to  mine  it  from  rich  mines  by  primitive  methods. 
Like  the  price  of  rent,  the  price  of  gold  is  determined 
at  the  lowest  margin  of  cultivation.  It  tlius  appears 
that    the    present    vakie    of    gold    is    largely    fiat  and 


PARASITIC  WEALT^I  59 

fictitious  as  that  of  silver  was  before  its  demonetixa- 
tion.  and  were  gold  suddenly  demonetized,  the  fiction 
would  be  squeezed  out  of  it  at  once.  Revoke  its 
privileges,  and  its  glory  will  depart  forever.  The 
halo  of  "mysterious  fascination''  which  it  is  said  to 
possess  and  which  holds  spell-bound  its  numerous 
eager  votaries  and  worshippers,  will  vanish  into  thin 
air.  Its  hollow  pretense  of  "nobility"  exposed,  its 
fiction  of  "intrinsic"  w^orth  exploded,  this  "precious" 
fraud,  degraded  and  humiliated,  will  take  its  place 
among  the  baser  herd  to  be  appraised  there  at  its  true 
worth.  Its  value  will  probably  sink  more  rapidly 
than  that  of  silver,  for  it  is  commercially  less  useful 
and  valuuable.  Where  its  depreciation  will  stop  is 
difficult  to  predict,  but  it  will  hardly  reach  its  former 
relative  value  of  i  to  i6. 

The  mint  value  of  gold  is  purely  arbitrary  and  may 
readily  be  changed  so  as  to  expand  or  contract  the 
money  volume.  Assuming  that  an  International 
Agreement  could  absolutely  guarantee  the  perma- 
nence and  stability  of  a  coinage  law,  and  that  by  the 
enactment  of  an  International  Monetary  Congress  it 
were  decreed,  that  twelve  grains  of  fine  gold  should 
.constitute  a  dollar  all  over  the  world,  immediately  the 
present  dollar  would  become  possessed  of  double  its 
purchasing  power  — would  do  the  nionc'v  work  of  two 


6o  PARASITIC  WEALTH 

dollars.  Interest  would  fall  and  price  of  gold  in  the 
arts  and  industries  would  be  doubled.  Trinkets  and 
jewelry  would  have  a  tendency  to  go  to  the  melting 
pot — the  demand  for  gold  in  the  natural  market  would 
be  greatly  cut  down  on  account  of  price,  and  nearly 
all  the  out-put  of  gold  would  go  to  the  mint  under  an 
unlimited  coinage  law.  The  ratio  of  silver  to  gold 
would  stand  at  something  like  75  to  i.  Worthless  and 
inferior  mines  would  be  reopened,  the  tailings  of  ex- 
hausted mines  reworked,  and  the  owners  of  present 
productive  mines  would  become  rich  beyond  the 
dreams  of  avarice.  Gold  extraction  would  be  stimu- 
lated to  the  highest  efficiency,  new  Klondikes  would 
be  discovered  by  eager  prospectors  and  the  stream  of 
gold  flowing  to  the  mints  would  expand  the  money 
volume  at  a  dangerous  pace.  Gold  mine  owners 
would  vie  with  the  owners  of  protected  monopolies 
and  become  the  masters  of  the  world. 

But  where  will  this  metal  basis  ultimately  land  us? 
Is  not  the  system  fraught  with  the  greatest  peril  even 
now  ?  Can  we  foresee  the  day  when  by  advanced 
chemical  research  gold  may  be  produced  at  such  low 
cost  and  in  such  large  quantities  as  to  smash  all  coin- 
age agreements  and  send  us  to  the  limbo  of  general 
ruin  and  bankruptcy  ? 

There  is  a  well  founded  suspicion  fhnt   most  of  the 


PARASITIC  WEALTH  6l 

60  or  70  so  called  chemical  elements  known  to  science 
are  not  elementary  bodies  at  all,  but  are  molecular  in 
structure,  and  have  simply  defied  our  present  analytic 
methods.  May  not  some  future  synthesis  based  on  a 
better  knowledge  of  chemistry  than  we  now  possess, 
produce  gold  from  true  elements? 

But  aside  from  this  possibility,  there  is  always  the 
risk  of  finding  exhaustless  deposits  of  gold  to  shake 
our  confidence  in  the  metal  basis.  Besides,  invention 
follows  in  the  wake  of  improvement  and  there  is  no 
telling  how  soon  an  enormously  increased  output  in 
the  ever  increasing  number  of  mines  may  overwhelm 
us  with  the  yellow  metal.  Indeed,  as  long  as  the 
present  metal  basis  is  in  force,  this  element  of  risk 
and  uncertainty  will  tend  to  a  panicky  and  speculative 
feeling,  portending  serious  disturbances,  if  not  com- 
mercial and  industrial  disaster. 


CHAPTER  IV. 

It  has  been  shown,  that  money  volume  and  money 
movement  have  both  largely  increased  since  i860, 
and  statistics  will  bear  us  out  that  productive  efficiency 
and  material  advancement  have  kept  pace  with  money 
circulation. 

We  had  reason  to  believe,  that  the  movement  of 
money  had  reached  a  practical  limit,  and  that  greater 
velocity  of  circulation  cannot  be  expected.  The  con- 
clusion is  forced  upon  us  that  whatever  advance  in 
money  efficiency  is  to  be  looked  for  in  the  future  must 
come  from  an  expansion  of  its  volume.  We  have 
taxed  the  energies  of  the  dollar  to  its  utmost  capacity, 
we  have  goaded  and  pushed  it  to  the  limits  of  en- 
durance, and  now  we  can  do  no  more.  We  must 
either  hire  more  dollars  to  relieve  the  arduous  duties 
of  the  present  overtaxed  force,  or  we  must  pay  more 
premium  as  population  advances.  The  dollar  is  the 
busiest  factor  in  our  civilization.  While  labor  is  at  a 
discount,  the  dollar  is  at  a  premium.  While  labor  is 
idle,  the  dollar  is  overworked.  While  labor  is  starv- 
ing, the  dollar  is    piling  up  income.     Why  rush  the 

dollar  so.'* 

6a 


PARASITIC    WEALTH  6^ 

We  have  seen  that  money  volume  as  compared  with 
weahh  volume  is  very  small,  and  that  the  onus  of 
exchange  and  wealth  productive  function  falls  upon  a 
limited  number  of  hustling  dollars.  So  small  is  the 
volume  of  dollars,  that  the  bulk  of  the  countrv's 
business  is  conducted  on  time  paper  or  credit  money, 
resulting  in  such  a  state  of  hopeless  credit  interdepend- 
ence, that  the  failure  of  one  business  firm  often 
involves  and  affects  the  stability  of  all,  causing  wide- 
spread panics  and  bankruptcies.  So  inadequate  is  the 
money  volume  that  no  considerable  reserve  fund  can 
be  kept  in  the  public  treasurv  without  seriously 
impairing  circulation,  and  in  critical  times  business  is 
kept  on  the  verge  of  a  panicky  feeling  lest  contraction 
through  hoarding  cripple  trade. 

So  small  is  the  money  force,  that  a  premium  has  to 
be  offered  to  coax  the  reluctant  dollars  into  the  finan- 
cial harness,  greatly  to  the  disparagement  of  all  in- 
dustrial and  business  undertakings  upon  which  this 
premium  falls  as  a  heavy  tribute.  This  premium  or 
interest  is  a  symptom  of  money  scarcity,  and  of  abun- 
dant industries  and  undertakings  competing  for  its  use. 

The  word  interest  as  used  by  financiers  has  tv>'o  dis- 
tinct meanings.  The  percentage  charge  v.hich  in- 
sures money  against  the  risk  of  loss,  is  one  form  of 
interest,  and  the  charge  for  the  use  or  hire  of   money 


64  PARASITIC  WEALTH 

Otherwise  amply  secured,  is  also  called  interest.  All 
enterprises  and  undertakings  partake  of  risk,  that  is, 
risk  of  loss  of  money  invested.  To  cover  such  risk 
where  money  is  loaned  without  adequate  security,  a 
rate  of  insurance  is  charged  proportionate  to  the  risk 
involved.  This  insurance  goes  under  the  name  of  in- 
terest. Such  a  charge  is  perfectly  legitimate  and  jus- 
tifiable. We  shall  not  call  into  question  the  propriety 
of  this  kind  of  interest.  What  concerns  us  here  is  the 
premium  on  money  amply  secured,  and  its  origin. 
We  shall  not  question  the  propriety  of  the  charge  for 
banking  and  clerical  work,  and  the  fees  and  percent- 
ages for  effecting  loans,  to  cover  expenses  and  salar- 
ies of  that  highly  efficient  and  useful  class,  the 
Bankers.  What  we  shall  examine  is  the  origin  and 
ethical  warrant  of  usur}-  proper.  It  is  to  be  clearly 
understood  at  the  outset  therefore,  that  the  word 
"interest"  is  to  be  used  simply  in  the  sense  of  money 
hire  and  apart  from  any  risk  of  loss  of  the  principal 
being  involved. 

How  does  interest  emerge?  There  are,  say, 
one  thousand  business  men  of  various  abilities,  all 
anxious  to  engage  in  some  commercial  or  industrial 
undertaking.  All  of  them  need  cash  advances  to  de- 
velop their  business  and  all  can  furnish  securities  for 
monev  loans.      One  hundred  of  these  men  have  ex- 


PARASITIC  WEALTH  6^ 

ceptional  executive  ability  and  business  genius  and 
sagacity,  andean  afford  to  pay  as  high  as  20  per  cent, 
on  money  adxances  rather  than  go  idle.  Two  hun- 
dred men  possess  a  very  high  order  of  business  capac- 
ity and  talent  and  can  pay  15  per  cent. rather  than  do 
without  the  cash.  Five  hundred  men  of  good  judg- 
ment and  ability  can  pay  10  per  cent,  and  swim,  but 
the  two  hundred  remaining  possessing  only  average 
ability  must  have  a  five  per  cent,  rate  or  go  oat  of 
business. 

If  it  require  at  least  700  business  men  to  properly 
take  care  of  the  industries  and  commercial  enterprises 
of  the  community  and  there  is  not  quite  enough  monev 
to  satisf}-  the  needs  of  that  number, the  competition  for 
funds  will  be  confined  to  the  live  hundred  men  of 
good  judgment  and  ability,  and  as  they  cannot  bid 
more  than  10  per  cent. premium  for  the  money,  that 
must  be  the  normal  rate  of  interest  at  which  the  lim- 
ited money  volume  may  be  borrowed  on  adequate 
security.  x\t  least  one  hundred  of  the  live  hundred 
men  of  good  judgment  will  be  non-suited  for  lack  of 
funds  at  10  per  cent.,  and  the  two  hundred  men  of 
average  ability  will  not  be  in  the  race  at  all.  It  is 
thus  apparent  that  business  has  been  competing  for  a 
limited  volume  of  money.  We  may  formulate  a  defi- 
nition of  interest  as  follows: 


66  PARASITIC  WEALTH 

Interest  or  premium  on  money  depends  upon  its 
volume  and  the  demand  made  upon  that  volume  by 
competing  industrial  and  commercial  undertakings. 
Interest  on  money  emerges  when  the  number  of  in- 
dustrial and  commercial  undertakings  requirino-  its 
use,  tend  to  overtake  its  available  volume.  The  rate 
of  interest  increases  as  the  pressure  of  competition  for 
the  hire  of  money  increases  and  is  determined  by  what 
the  least  remunerative  of  the  actually  operative  indus- 
tries are  obliged  to  pay  and  yet  maintain  themselves 
in  competition  with  more  successful  rivals. 

In  plain  language,  interest  emerges  when  an  ex- 
panded volume  of  industrial  and  commercial  enter- 
prises is  competing  for  a  limited  volume  of  monev. 
Interest  discourages  the  less  remunerative  industries 
and  the  less  efUcient  promoters  of  business. 

Scarcity  of  money  occasions  a  premium  charge  for 
money  use.  Like  rent  of  land  emerging  from  land 
limitation  or  monopoly,  so  rent  of  money  emerges 
from  its  limitation  or  monopoly.  The  rent  collectors 
of  these  industrial  opportunities  obtain  without  exer- 
tion what  naturally  belongs  to  productive  effort. 

Here  is  the  optimistic  view  of  interest  as  taught  by 
one  of  our  most  popular  textbooks  on  Political  Econ- 
omy. 

"Is  the  high  rate  of  interest  a  hardship.^     No, 


PARASITIC  WEALTH  67 

the  hardship  lies  in  the  scarcity  of  capital.      The 
high  rate  of  interest  becomes  the  active  means  of 
removing  that  hardship   through   increasing   the 
supply  of  capital  available  to  meet  the  demand. 
A  high  rate  of  interest  is  not  an  evil  but  the  cure 
of  an  evil.'' 
Indeed  the  cure  never  cures ;  the  evil  persists  and 
is  simply  aggravated  at  times.       The  world's  money 
volume  is  as  it  were,  a  limited  sheet  of   Avater  upon 
which  it  is  proposed   to  float  the   ships  of   commerce 
and  industry.      The  water  is  so  shallow  however,  that 
whenever  a  successful  enterprise  is   to  be  floated,  the 
level  must  be  raised  artificially.     As  the  level  is  raised 
in  some  financial  dry-dock  by  the  hydraulic  power  of 
Interest,  it  must   be  simultaneously   depressed  some- 
where else.      The  volume  of  water  is  never  sufficient 
to  successfully  float  all  the  ships  that  would  naturally 
ply  the  ports  of  trade,  but  only  that  number  that  can 
afford  to  have  the  water  pumped  up.        Less   water, 
more  hydraulic  power,  less  money,  more  interest. 

Let  us  use  another  illustration  :  Suppose  we  have 
150  fields  to  cultivate.  75  wMlling  men  to  work, 
and  only  50  hoes  to  cultivate  with.  Assume  that  the 
150  fields  have  30  overseers  who  rent  them  according 
to  productiveness.  The  hoes  are  owned  by  "'capital- 
ists." Let  us  imagine  that  in  some  way  these  50 
hoes  possess   the  marvelous  efficiency   of   money   and 


68  PARASITIC    WEALTH 

the  fields  cannot   be   successfully    cultivated  without 
them.      What  will  happen  ? 

Fields  are  in  excess  of  men,  but  hoes  are  scarce. 
The  fields  will  compete  for  hoes,  and  as  they  cannot 
all  have  the  use  of  them,  only  50  of  the  more  produc- 
tive will  be  able  to  enter  tiie  contest.  Whatever  the 
least  productive  of  these  50  tields  can  afford  to  pav, 
that  will  be  the  normal  hire  of  the  hoes.  In  other 
words,  hoes  will  go  to  a  premium,  fields  and  men 
will  be  at  a  discount.  One  hundred  fields  must  re- 
main uncultivated,  and  twenty-five  men  after  destruct- 
ive competition  with  the  other  fifty  for  work,  will  re- 
main idle.  Twenty  field  overseers  must  also  remain 
idle. 

Let  us  reverse  this.  Assume  now  that  there  are 
500  hoes  in  stock,  the  same  150  fields  and  the  same  75 
men  willing  to  work.      What  will  happen  ? 

There  are  now  more  hoes  than  fields  and  more  fields 
than  men.  The  competition  must  be  for  the  men, 
and  not  only  will  all  of  them  be  employed  at  advanced 
rates,  but  the  owners  of  the  fields  will  likewise  bene- 
til  by  the  collapsed  monopoly  of  the  hoes.  Fifteen 
of  the  overseers  will  be  employed  superintending  and 
the  balance  mav  find  lucrative  work  as  field  hands  if 
they  desire.  In  other  words,  the  men  are  at  a  prem- 
ium and  natural  opportunities  are  a  drug.  Men  arc 
busv.  hoes  are  idle  and  fields  are  idle. 


PARASITIC  WEALTH  69 

This  is  an  ideal  condition  of  things.  The  natural 
opportunities  for  employment  are  boundless,  limited 
by  space  only.  Work  is  in  overwhelming  abundance 
everywhere,  and  an  army  of  one  hundred  million 
workers,  representing  a  populaiion  of  nearly  half  a 
billion,  could  be  continuously  employed,  and  not  half 
exhaust  the  resources  of  work  in  the  United  States, 
if  the  industrial  opportunities,  land  and  ''capital," 
were  not  limited  by  monopoly.  There  can  never  be 
any  competition  for  work  in  a  normal  social  condi- 
tion, any  more  than  there  is  for  air  or  water.  The 
competition  would  be  for  efficient  men  to  do  it. 

It  is  a  well  known  economic  phenomenon  that 
when  opportunities  for  investment  are  plenty,  the 
demand  for  money  is  brisk  and  interest  is  high. 
Incidental  to  this  active  competition  for  money, 
labor  is  in  greater  demand  and  business  im- 
proves. But  like  an  air  brake  applied  to  the  wheels 
of  industr}-,  interest  slows  up  the  speed  of  productive 
effort  as  the  premium  pressure  increases.  The  money 
limit,  as  it  were,  calls  a  halt  to  industrial  effort,  and 
throws  labor,  seeking  emplo3'ment,  into  competition 
with  itself,  thus  not  only  taxing  it,  but  likewise  leav- 
injr  it  in  enforced  idleness. 

In  over-crowded  Europe,  where  agricultural  possi- 
bilities have  reached   their  limit,    where    productive 


70  PARASITIC  WEALTH 

efficiency  and  the  plane  of  living  are  lower,  where 
commercial  and  industrial  effort  is  less  active,  the  de- 
mand for  the  money  function  is  not  so  brisk  and  the 
interest  rates  are  not  so  high  as  in  this  country.  Up 
to  the  fall  of  the  year  1896,  the  bank  rates  in  England 
were  two  per  cent.  But  an  era  of  activity  set  in  dur- 
ing the  spring  of  that  year,  owing  to  development  of 
colonial  enterprises  and  South  African  gold  mining. 
The  papers  teemed  with  Promotor's  Investment 
schemes,  and  demand  for  money  became  so  brisk 
that  interest  rates,  following  the  laws  of  exchange, 
increased,  and  shortly  doubled  in  amount. 

Now  if  the  mone}'  volume  were  so  ample  that  in  a 
period  of  greatest  possible  industrial  activity,  five,  or 
ten  times  as  much  money  lay  idle  in  the  banks  as 
could  be  used  in  commercial  and  industrial  undertak- 
ings, premium  could  not  arise  to  act  as  a  deterrent  to 
production.  Money  being  eager  for  investment,  by 
virtue  of  its  abundance,  would  yield  no  premium,  and 
the  price  of  its  hire  would  simpl}-  be  the  cost  of  bank 
services,  as  will  be  explained  later. 

Perhaps  no  question  in  Political  Science  has  so  puz- 
zled economic  writers  as  the  question  of  interest, 
and  in  view  of  the  apparent  simplicity  (jf  the  problem, 
it  seems  rather  surprising  that  it  has  not  ere  this  been 
satisfactorily  answered.  As    if    quite    dominated 


PARASITIC  WEALTH  7 1 

by  the  powerful  influence  of  authority  and  pre- 
cedent, our  teachers  have  chosen  the  beaten  track  and 
followed  in  the  wake  of  their  predecessors.  Tiiey 
have  indulged  in  abstruse  speculations,  and  strained 
fact  and  fancy  in  the  elaboration  of  ingenious  theories 
to  account  for  a  very  common-place  phenomenon. 
Laymen  and  professionals  have  treated  in  learned 
books  and  essays  of  this  subject  and  as  many  theories 
have  been  advanced  as  there  have  been  writers  to  in- 
vent them. 

Be  it  to  the  lasting  honor  and  credit  of  the  Church 
that  for  centuries  she  refused  her  moral  support  and 
sanction  to  the  practice  of  usury  and  yielded  onh' 
when  it  was  demonstrated  beyond  a  doubt  that  legis- 
lative restrictions  actually  worked  hardship  and  re- 
tarded social  development,  and  that  it  was  better  to 
tolerate  the  apparently  unavoidable  evils  of  usury, 
than  to  stifle  social  progress. 

In  his  Political  Economy,  the  late  lamented  Gen. 
Walker  says: 

"For  many  centuries,  and  even  within  a  compara- 
tively recent  period,  the  Christian  Church  proscribed 
the  taking  of  interest  as  a  moral  offense,  and  the  laws 
of  nearly  all  civilized  countries  made  it  a  crime, 
while  the  voice  of  publicists  and  ethical  writers  alike 
was  raised  against  it  as  a  wicked  and  pernicious  prac- 
tice.    Whence  came  the  fjeneral  consent  in  denounc- 


72  PARASITIC  WEALTH 

ing  that  which  to-day  is  accented  as  a  rigJit  in  morals, 
and  as  practically  beneficial  by  all  except  a  few  fanat- 
ics.?'' 

The  author  is  responsible  for  the  italics.  He  gladly 
owns  to  beinp"  one  of  the  few  fanatics. 

The  philosophical  conscience  was  not  soothed, 
however,  until  some  one  suggested  that  interest,  after 
all,  was  not  paid  on  money,  but  on  what  money  pur- 
chased, as  if  shifting  the  iniquities  of  usury  on  the 
shoulders  of  wealth  palliated  the  crime  of  it! 

John  Calvin  is  credited  with  making  this  discovery, 
and  since  his  time  writers  on  Economics  have  been 
trying  to  reconcile  Political  Economy  with  this  view, 
and  endeavoring  to  find  a  plausible  theory  of  interest 
on  the  basis  of  some  inherent  properties  in  wealth  or 
in  human  nature. 

Speaking  of  Aristotle's  philosophical  objection  to 
usury,  Gen.  Walker  says,  in  First  Lessons  of  Politi- 
cal Economy,  edition  of  1893  : 

"The  error  lies  in  the  assumption  that  interest  is 
paid  for  the  use  of  money,  whereas  in  fact  interest  is 
paid  for  the  use,  not  of  money,  but  of  capital.  A 
man  buys  a  house  and  promises  to  pay  the  price  at 
some  future  time  with  'interest'  meanwhile.  Inter- 
est upon  what  .^  Interest  upon  money?  lie  has  no 
money.  The  interest  promised  is  upon  capital  in- 
vested in  the  house. '^ 

Passing  by  the  confusion  of  ideas  in   the  citation. 


PARASITIC  WEALTH  73 

the  reader's  attention  is  drawn  to  the  last  sentence 
which  virtually  surrenders  his  case  to  his  adversary. 
The  loose  manner  of  interchangeably  using  the  word 
'■*  Capital''  to  mean  money  in  one  sense  and  the  pro- 
ducts of  the  money  function  in  another,  has  landed 
the  writer  into  a  verbal  inconsistency.  It  was  by  the 
money  function  that  the  materials  of  the  house  were 
created.  It  was  the  money  function  that  built  the 
house  with  the  materials  created  by  the  money  func- 
tion. It  was  the  money  invested  in  the  house  on 
which  interest  must  be  paid,  seeing  that  '*he  has  no 
money"  to  pay  cash.  In  the  last  analysis  all  invest- 
ment consists  of  money,  and  all  interest  is  paid  on  the 
investment.  We  pay  for  the  hire  of  the  money  in- 
vested, because  there  is  a  constant  demand  for  money 
in  other  commercial  and  industrial  undertakings  which 

eagerly  seek  its  function.  It  must  be  released  and 
interest  is  the  forfeit  price  of  its  ransom. 

Again  he  says : 

"  A  merchant  or  manufacturer  buys  a  stock  of  goods 
and  gives  his  note  promising  to  pay  the  price  'with 
interest'.  Not  interest  upon  money,  for  money  was 
not  used  in  the  transaction,  but  interest  upon  Capital 
in  the  form  of  merchandise  or  materials  which  have 
been  entrusted  to  him  and  out  of  which  he  expects  to 
make  a  profit  which  he  is  to  share  with  the  owner  of 
the  capital." 


74  PARASITIC  WEALTH 

Most  marvelous  reasoning !  Surely  the  goods,  for 
which  note  was  given  have  not  only  been  the  product 
of  the  money  function,  but  in  turn  they  have  cost  the 
wholesaler  money,  and  he  doubtless  gave  his  note  for 
them  "with  interest"'  to  pay  the  manufacturer  for 
money  used  productively ;  and  the  manufacturer  in 
turn  gave  the  bank  a  mortgage  to  secure  not  only  the 
principal  but  the  interest  also.  The  interest  is  always 
paid  on  money  and  on  nothing  else.  How  can  it  be 
otherv^ise  ?  Do  what  we  will,  we  cannot  get  away 
from  the  money  function  in  commerce  and  industry,  for 
even  barter  is  carried  on  in  terms  of  money.  Money 
is  an  industrial  factor  and  wealth  is  its  product.  We 
can  no  more  escape  the  subtle,  all-pervading  influence 
of  money  in  our  civilization,  than  we  can  get  out  of 
the  influence  of  the  atmosphere  and  breathe. 

When  we  unlearn  the  fallacy  of  the  '-Capital"  theory 
of  interest  of  John  Calvin,  and  fully  realize  that  the 
premium  is  paid  on  the  money  function  of  capital, 
then  it  will  become  quite  clear  that  usury  as  we  know 
it.  with  all  its  deplorable  consequences,  is  simply  the 
result  of  abnormal  economic  conditions  and  may  be 
practically  abolished. 

The  history  of  "usury"  speculations  forms  a  curious 
and  interesting  chapter  in  Political  Economy.  A 
summary  of  them  is  given  in  a  late  work  by  Von  Bohm 


PARASITIC  WEALTH  75 

Bavverk — (^Capital  and  Interest— Prof.  Smart's  trans- 
lation). It  is  a  review  of  the  various  theories  of  In- 
terest with  an  elaboration  of  one  of  his  own,  based  on 
the  "tendency  in  human  nature  to  under-value  the 
future  in  comparison  to  the  present."  This  theory 
Professor  John  B.  Clark  aptly  calls  Interest  for  "vi- 
carious waiting". 

Among  several  others  are  the  theories  of  "  Land 
Investment, ""Spontaneous  Reproduction  "  and  "  Re- 
ward for  Abstinence." 

The  first  assumes  that,  as  money  invested  in  land 
brings  an  income,  that  therefore  investment  in  any 
form  of  capital  must  pay  an  interest. 

The  reproductive  theory  assumes  that  as  crops  grow 
and  animals  breed  v/ithout  man's  assistance,  there- 
fore it  is  in  the  nature  of  capital  to  possess  like  power 
of  reproduction. 

The  reward  for  abstinence  theory  is  expressed  in 
Prof.  Iladley's  Economics,  pages  268-269,  as  follows: 

"The  system  of  interest  was  approved  by  jurists 
because  the  accumulation  and  use  of  capital  was  ad- 
vantageous to  society  as  a  whole  and  increased  the 
public  wealth."  "With  this  end  in  view,  society  was 
willing  to  offer  rewards  to  those  who  would  abstain 
from  destroying  wealth  and  would  use  it  product- 
ively." 

The  land  and  reproductive  theories  carry  their  own 


76  PARASITIC  V.'EALTM 

refutation.  Von  Bohm  Bawerk's  explanation,  like 
that  of  the  reward  for  abstinence,  appears  plausible 
in  theory,  but  is  lacking  in  practice.  They  are  both, 
speaking  generally,  based  on  personal  sacrilice. 

Let  us  examine  the  reward  for  abstinence  theor}'. 

The  sacrifice  of  abstinence  has  its  full  measure  of 
reward  in  possession.  That  the  possession  should  in 
addition  give  the  possessor  an  undue  advantage  over 
the  productive  effort  of  others  is  not  contemplated  in 
the  reward. 

Human  effort  tends  to  move  in  the  line  of  least  dis- 
comfort. The  idea  of  discomfort  in  the  normal  man 
embraces  not  only  the  pressing  needs  of  the  present, 
but  likewise  the  urgent  wants  of  the  future.  This 
gives  rise  to  prudence  and  thrift.  The  discomfort  of 
present  abstemiousness  is  fully  counterbalanced  by  the 
satisfaction  and  comfort  of  providing  against  the  dis- 
tresses of  future  privation  and  penury.  In  the  miser 
this  instinct  is  abnormally  developed,  and  in  the  spend- 
thrift wholly  lacking.  Except  in  the  case  of  the 
morally  depraved,  the  motive  of  thrift  and  saving  is 
independent  of  the  sordid  instinct  our  economic  writ- 
ers would  have  us  believe.  In  other  words,  people 
do  not  save  money  for  the  sake  of  obtaining  usury  on 
it,  but  for  the  purpose  of  providing  against  sickness 
and  old  age.     A  high  premium  might  act  as  an  addi- 


PARASITIC    WEALTH  77 

tional  inducement  for  the  sordid-minded  to  save  their 
money ;  in  fact,  usury  is  doubtless  responsible  for 
much  of  the  immorality  of  greed  and  avarice,  but 
even  then  the  incentive  must  be  weak  compared  with 
the  real  motive  of  thrift. 

It  thus  appears,  that  under  normal  and  natural 
conditions,  capital  would  be  saved  from  "destruction" 
and  accumulate  without  the  stimulus  of  other  than 
purely  moral  motives  of  thrift.  Usury  then,  seems  to 
have  no  real  economic  value  as  an  inducement  to  sav- 
ing and  must  simply  be  an  incident  to  certain  econo- 
mic conditions. 

The  prevailing  ethics  of  usury  seemingly  resolves 
itself  into  this:  How  can  we  get  something  for 
nothing? 

Usury  is  defended  on  the  plea  that  capital  "snatched 
from  the  jaws  of  appetite''  at  great  personal  sacrifice, 
is  a  factor  of  industrial  effort  and  benefits  society  b}'' 
creating  wealth.  Society  is  willing  to  reward  those 
making  this  sacrifice  by  giving  them  interest  on  this 
capital  when  used  productively. 

Divested  of  its  ethical  glamour,  the  real  condition 
is  this:  By  virtue  of  certain  economic  limitations, 
capital  is  enabled  to  unjustly  appropriate  a  large  share 
of  the  products  of  industry  as  the  price  of  its  hire. 

Rev\'ard  for  sacrifice  does  not  enter  into  the  problem 


yS  PARASITIC    WEALTH 

at  all,  for  barring  a  few  exceptional  cases,  the  suffer- 
inp-  and  sacrifice  are  entirely  vicarious,  and  fall  on 
those  who  make  a  desperate  effort  to  save  on  reduced 
earnings.  A  limited  few  obtain  control  of  the  natural 
opportunities  of  the  earth  and  place  all  productive 
effort  under  tribute.  It  costs  them  no  effort  or  incon- 
venience to  save— deferred  hopes  do  not  figure  in 
patient  waiting,  and  sacrifice  of  abstinence  is  not  even 
thought  of.  The  v/ealth  rolls  up  of  its  own  accord, 
and  keeps  on  accumulating.  It  grows  at  the  expense 
of  the  sweat  and  toil  of  those  paying  tribute  for  in- 
dustrial opportunities.  The  suffering  is  vicarious. 
Five  per  cent,  of  the  people  do  the  saving  and  ninety- 
five  per  cent,  do  the  suffering. 

Another  popular  notion,  is  that  Labor  is  under  obli- 
gations to  capital  for  its  subsistence.  Capital  is  ad- 
vanced by  the  employer  to  enable  Labor  to  subsist. 
Capital  is  a  reserve  fund  or  "grub  stake,"  and 
therefore  entitled  to  interest  as  the  price  of  its  use. 
But  Labor  owes  capital  nothing,  capital  has  no  claim 
whatever  on  Labor  in  that  respect.  Labor  anticipates 
its  reward  in  wages  by  producing  wealth  before  being 
paid  for  it. 

It  is  not  a  question  v/hether  society  benefits  by 
virtue  of  wealth  being  used  productively,  it  is  a  ques- 
tion whether  it  is  economically  necessary  to  pay  inter- 


TARASITIC    WEALTH  79 

est  for  its  hire  except  at  a  negligible  rate,    such  hire 
charge  being  an  equivalent  of  actual  services  rendered. 

If  we  can  prove  that  under  normal  financial  con- 
ditions, interest  on  money  will  practically  cease,  then 
we  have  solved  the  problem.  What  are  the  conditions  ? 
The  answer  has  been  plainly  indicated — expand  the 
money  volume.  How  this  can  be  done  practically 
and  how  we  can  secure  a  currency  of  unchallenge- 
able stability,  will  be  explained  further  on.  When 
will  the  money  volume  be  sufficient?  The  money 
volume  will  be  sufficient,  when  it  is  so  abundant  that 
banks  will  refuse  to  pay  any  premium  on  it — when 
the}'  will  charge  a  price  for  its  safe-guarding.  Not  till 
then  will  the  money  volume  be  ample ;  not  till  then 
will  all  property  cease  to  jield  non-productive  revenue 
and  industry  bear  a  tribute  to  idleness. 

In  his  article  on  the  "Cause  of  Financial  Panics" 
in  the  Arena  for  March,  1894,  Mr.  J.  W.  Bennett 
writes  as  follows : 

"The  borrowed  capital  of  the  country  claims  more 
in  remuneration  than  the  country  can  produce.  Every 
dollar  invested  in  business  claims  a  return  called  in- 
terest. Every  dollar  representing  debts  unpaid  claims 
a  like  remuneration.  There  is  not  wealth  enough  to 
meet  all  these  obligations  and  the  business  of  the 
world  must  go  into  the  hands  of  a  receiver  every  now 
j}r)d  then  so  that  a  new  start  in  business  may  be  made. 


8o  PARASITIC    WEALTH 

The  industrial  world  is  always  in  a  state  of  potential 
bankruptcy,  but  credit  tends  to  keep  it  out  of  the 
hands  of  a  receiver." 

"Any  disturbance  of  credit  precipitates  a  panic." 

"The  present  wealth  of  the  United  States  may  be 
placed  in  round  numbers  at  $72,000,000,000.  That 
fully  80  per  cent,  of  this  sum  pays  interest  may  be 
verified  by  any  person  who  cares  to  give  the  subject 
a  thought." 

"Something  like  80  per  cent,  of  the  wealth  of  the 
country  is  in  the  hands  of  about  250,000  persons,  or 
about  one  two  hundred  and  fortieth  of  the  popula- 
tion. This  excludes  the  wealth  of  the  well  to*  do 
farmers  and  merchants,  and  it  goes  without  saying 
that  nine-tenths  of  this  wealth  held  by  the  immensely 
rich  is  interest  bearing.  Nearly  all  of  it  is  lent,  or  if 
not  lent  out  it  is  invested  in  some  business  where  in- 
terest on  the  money  invested  is  added  to  the  return 
or  profits  of  the  undertakers.  The  wealth  in  the 
hands  of  farmers  and  merchants  is  paying  interest  on 
all  that  is  not  used  for  the  personal  wants  of  them- 
selves and  their  families,  and  even  many  of  the  home- 
steads of  the  country  are  paying  interest." 

"At  least  one-half  of  such  wealth  is  interest  bear- 
ing. An  examination  of  the  mortgage  lists  of  the 
several  States  will  more  than  bear  out  this  estimate. 
We  are  then  paying  fixed  charges,  as  the  railroads 
put  it,  on  about  $55,000,000,000  of  the  country's 
wealth.  The  net  rate  will  average  about  five  per 
cent.,  and  taking  into  consideration   commissions  and 


PARASITIC    WEALTH  8 1 

Other  charges,  six  per  cent,  is  a  low  estimate  of  the 
gross  rate.  The  interest  on  $55,000,000,000  at  six 
per  cent,  is  $3,300,000,000  per  year.  To  get  the. 
average  interest  charges  for  the  last  decade,  we  must 
take  the  average  of  interest  paying  capital,  which  is 
about  $50,000,000,000.  We  have  then  an  average 
interest  of  $3,000,000,000,  a  sum  which  more  than 
absorbs  the  entire  veariv  increase  of  wealth  in  the 
United  States.  During  the  last  decade  the  wealth  of 
tiiis  country  has  increased  about  $22,000,000,000. 
During  the  same  period  the  interest  charges  were 
$30,000,000,000."  (Mr.  Bennett  has  since  em- 
bodied his  views  on  usury  in  his  book,  "A  Breed  of 
Barren  Metah'') 

Thus  it  seems  that  premium  interest  more  than  ab- 
sorbs the  yearly  wealth  increase.  The  cumulative 
power  of  interest  will  better  appeal  to  the  imagina- 
tion when  plotted  into  a  curve  as  shown  on  Plate  V.  At 
ten  per  cent  the  principal  is  doubled  every  seven 
years,  so  that  in  less  than  a  century  the  interest  is  six- 
teen thousand,  three  hundred  and  eighty-four  times 
the  principal,  and  after  that  the  principal  increases  at 
such  a  stvipendous  rate  that  the  figures  soon  become 
unmanageable.  At  five  per  cent  the  principal  doubles 
every  fourteen  years,  just  half  as  rapidly  as  at  ten 
per  cent.  Interest  accumulates  in  a  geometrical  ratio, 
while  savings  increase  aritb.metically.  Thus  if  $10 
is   saved  up,  say  every  seven  years,  in  140  years  the 


£i^A,iA  -ZeKe.i. 


—  MONEY  VOLUME  TO  WEALTH  VOLUME 


Seven^iii-  J^eyei^ . 


PLATE  T.  curve:  OF  INTEREST. 


1 


rea.ai,ej  <5£e  ^:je ^-He^yOa^&j  and 
ai  iAe,  t3Z  ':^  le-t^^Z  i^  tycli  7-ecctA 
ccn  c^ei^a-fce-n,  ^n,cre,  tA^n.  OTt.e^ 


ScxiA  J^er-ci ■ 


sr^/eA.  Ziefci . 


PARASITIC    WEALTH  83 

principal  will  amount  to  ^200.  If,  however,  ten  dol- 
lars is  put  into  a  bank  at  ten  per  cent,  interest  every 
seven  years,  at  the  end  of  140  years  the  principal  will 
have  become  over  twenty  millions  of  dollars ! 

On  comparing  the  curves  of  wealth  with  the  curve 
of  interest,  the  resemblance  is  very  striking  and  be- 
trays their  kinship.  The  curves  of  w^ealth  and  in- 
come suddenl}^  leap  into  space  at  the  end  where  rent 
and  interest  absorb  the  nation's  yearlj'  output. 

Here  then  is  the  subtle  principle  which  makes 
wealth  parasitic  in  the  body  of  industry — the  potent 
influence  which  takes  from  the  weak  and  gives  to  the 
strong ;  which  makes  the  rich  richer  and  the  poor 
poorer ;  which  builds  palaces  for  the  idle  and  hovels 
for  the  dilioent.  This,  then,  is  the  bacillus  of  con- 
gested  wealth — the  disease  germ  of  pauperism. 

But  worse  than  that,  interest  enslaves  labor.  We 
might  condone  the  injustice  of  interest,  if  it  left  us 
free  to  earn,  but  it  limits  industry  by  closing  up  the 
avenues  of  employment,  and  fetters  industrial  effort 
by  making  it  competitive.  Employment  which  should 
be  free  and  accessible,  instead  of  a  right,  becomes  a 
favor  and  a  privilege  !  Interest  is  the  price  every  in- 
dustry pays  capital  as  a  license  to  do  business.  If  it 
cannot  pay  the  tax  it  must  shut  down.  Interest  is  a 
sort  of  tariff  on  human  effort  to  discourage  enterprise ; 


84  PARASITIC  WEALTH 

it  is  a  fixed  charge  on  commerce  and  industr}^  Thus 
it  is  that  we  always  have  a  glut  of  labor  instead  of  a 
glut  of  employment.  Think  of  it,  even  now  there  are 
millions  of  unemployed  actually  begging  for  work  in 
a  land  of  boundless  opportunities  and  resources!  Such 
a  perverted  state  of  things  should  long  ago  have  con- 
demned the  economic  conditions  that  produced  it,  and 
set  our  teachers  of  Political  Economy  to  thinking. 
Three  per  cent,  of  the  people  control  the  avenues  of 
employment  and  ninety-seven  per  cent. are  dependent 
on  their  pleasure.  And  as  the  wealth  piles  up  in  the 
hands  of  these  monopolizers  of  opportunities,  the 
tribute  must  be  heavier  and  escape  from  industrial 
slavery  more  hopeless.  The  wealth  of  the  few  be- 
comes a  burthen  to  the  many — a  millstone  about  the 
neck  of  labor — and  as  it  grows  the  burthen  increases. 
We  thus  realize,  how  that  industry  with  its  own  hands 
forges  the  chains  of  its  enslavement.  And  are  we 
not  reminded  of  it  on  every  hand?  Have  we  not  the 
spectacle  of  lordly  display  and  ostentation  on  the  one 
hand,  and  abject  flunkeyism  on  the  other?  Has  not 
a  perverted  social  condition  led  to  perverted  ideas  of 
personal  worth  and  respectabilit}-  ?  Do  we  not  see  the 
despised  "Bread  Winners''  treated  with  scorn  and  con- 
tempt while  the  idle  rich  are  received  with  distin- 
guished courtesy  and  respect  ? 


PARy\SITIC  WEALTH  8$ 

The  predatory  class  has  heretofore  been  located  in 
the  lower, strata  of  society;  but  what  shall  we  say  of 
the  parasitic  wealth  on  top?  The  social  loot  is  not  at 
the  bottom,  it  is  among  the  dizzy  millions. 

Where  shall  we  place  the  blame  for  a  social  per- 
version so  long  endm-ed  ?  While  instinctively  all 
right  minded  people  have  felt  that  usury  was  morally 
reprehensible,  and  philosophic  writers  could  find  r.o 
ethical  warrant  for  its  justification — while  economic 
writers  themselves  approached  the  subject  with  moral 
misgivings,  yet  all  these  years  interest  was  approved 
as  "right  in  morals,"  and  land  ownership  (with  a  few 
honorable  exceptions)  justified.  Symptoms  of  social 
unrest  and  miser}-  counted  for  nothing.  The  pertur- 
bations and  disturbances  brought  forth  no  Leverrier 
of  Political  Science  to  trace  their  cause  in  the  eco- 
nomic firmament.  All  this  time  there  lay  at  the  root 
of  our  social  miseries  the  dread  germ  of  disease  "in- 
terest," for  the  cultivation  of  which  in  the  soil  of  in- 
dustry, the  "capital"  theory  of  usury  was  and  is 
economically  responsible. 

This  pernicious  theory  has  been  the  bane  of  Politi- 
cal Science — the  evil  spirit  leading  it  from  the  path  of 
economic  rectitude  and  righteousness — and  its  over- 
throw will  mark  a  new  era  in  the  history  of  a  noble 
science,  long  under  the  shadow  of  doubt  and  suspi- 
cion as  to  its  moral  integrity. 


86  PARASITIC    WEALTH 

Here  is  a  hand  sample  of  our  present  Political 
economy,  as  culled  at  random  from  a  recent  financial 
work : 

"Capital  is  an  economic  quantity  used  for  the  pur- 
pose of  profit." 

"Whatever  gives  a  proft  is  capital." 

Could  anj'thing  be  more  brutally  frank  and  blunt 
than  this  plain  statement  of  the  case  ? 

Let  us  apply  this  definition  to  land,  the  other  fac- 
tor of  industry : 

"Land  is  an  economic  quantity  used  for  the  pur- 
pose of  profit." 

"Whatever  gives  profit  is  land." 

Here  we  have  the  two  industrial  opportunities  of 
productive  effort  used  as  instruments  of  extortion  for 
private  gain,  and  economic  writers  have  seen  nothing 
wrong  in  a  condition  which  permits  of  their  limitation 
and  monopoly.  The  doctrine  is  monstrous,  and  as 
we  contemplate  the  enormity  of  it,  the  iniquity  of  the 
social  crime  grows  upon  us.  These  two  great  mono- 
polies practically  control  the  avenues  of  employment 
and  place  Labor  entirely  at  the  mercy  of  those  in 
possession.  A  shrewd  minority  taking  advantage  of 
unjust  economic  conditions  places  the  majority  under 
tribute.  Labor  rendered  hopelessly  competitive,  be- 
comes helpless,  degraded  and  enslaved,  is  sold  in  the 


PARASITIC    WEALTH  87 

open  market  like  chattels.  Can  anything  be  more 
strategic  ?  Can  slavery  be  more  absolute  than  under 
the  compulsion  of  hunger  ? 

The  shrewd  minority  is  in  control.  It  is,  and  has 
been,  a  government  of  the  rich,  by  the  rich  and  for 
the  rich.  The  masses  and  their  interests  have  been 
a  secondary  consideration  as  we  may  discover  by  read- 
ing our  text  books  on  Political  Science.  The  shoe 
pinched  the  poor,  ignorant  and  down-trodden,  but  not 
the  rich  and  clever,  and  therein  lies  the  whole  secret 
of  reluctant  reform.  An  income  tax  affecting  the 
unjustly  rich  is  promptly  set  aside  as  "unconsti- 
tutional," while  a  tariff  tax  which  further  depletes 
those  already  otherwise  despoiled,  is  enforced 
as  being  just  and  proper.  The  interests  of  the  rich  are 
promoted  by  special  legislation,  and  laws  prejudicial 
to  them  set  aside  or  not  enforced. 

The  rich  misdemeanant  escapes  punishment  by  pay- 
ing a  fine ;  the  poor  man  unable  to  do  so,  is  put  in  jail 
and  his  family  further  pauperized.  The  parasitic 
idler  is  shown  all  possible  social  courtesies  and  con- 
sideration, while  the  w^orker  is  socially  ostracized  and 
discriminated  against.  And  so  this  precious  social 
system  of  ours  which  creates  a  predatory  idle  class, 
and  a  despoiled  productive  class,  simply  reflects  the 
ethical  features  of   the    economics   that    produced    it. 


88  PARASITIC  WEALTH 

All  our  laws  seem  to  be  framed  to  further  encour- 
age those  socially  benefited  and  discourage  those 
socially  wronged.  The  whole  machiner}'  of  state, 
the  legislative,  judicial  and  social  arrangements,  all 
favor  loot  and  oppress  the  looted. 

If  we  examine  the  constituents  of  our  leofislature, 
we  find  therein,  with  here  and  there  an  exception,  the 
rich  and  the  representatives  of  the  rich.  They  are 
either  the  so-called  "successful"  business  men,  or 
corporation  lawyers  whose  interests  are  with  wealth 
aggregations.  The  "successful"'  business  man  does 
not  necessarily  mean  one  who  benefited  the  commun- 
ity as  much  as  himself,  but  one  who  grasped  the  op- 
portunities a  perverted  4social  condition  offered,  to  be- 
come Vv'ell  to  do  at  the  expense  of  society.  Naturally 
such  people  see  nothing  wrong  in  a  social  condition 
which  gives  them  such  enormous  advantages  over 
their  fellowmen,  and  are  quick  to  denounce  those  who 
find  fault  with  the  system,  as  "agitators",  "dema- 
gogues", "socialists"  and  what  not.  But  calling 
names  is  poor  argument,  and  will  not  avail  a  moment 
against  a  well  defined  policy  backed  by  a  solid  eco- 
nomic principle.  The  people  are  becoming  very  tired 
and  impatient.  They  have  lost  confidence  in  the 
two  great  parties,  and  from  sheer  desperation  to  ob- 
tain relief,  have  alternately  punished   them   by   over- 


PARASITIC    WEALTH  89 

whelming  defeats.  They  are  tired  of  promises  and 
apologies ;  they  want  reform  and  they  will  have  re- 
form. 


CHAPTER  V. 

We  have  thus  far  confined  our  remarks  to  the 
money  question  and  the  evils  of  interest,  but  the  solu- 
tion of  the  money  problem  involves  the  solution  of  the 
land  question.  Money  and  Land  are  the  two  econo- 
mic factors  for  the  use  of  which  industrial  effort  is 
taxed.  Money  and  the  products  of  its  function  take 
their  toll  in  interest,  and  land  in  rent. 

Thanks  to  the  classical  works  of  Mr.  Henry  George, 
very  little  if  anything  remains  to  be  said  on  the  land 
question  that  has  not  already  been  discussed  with 
great  eloquence  and  ability  in  his  books. 

Up  to  a  certain  point,  the  private  ownership  of 
land  might  be  indifferently  defended  on  the  plea  of 
expediency,  but  when  immense  tracts  of  land  are 
monopolized  for  speculative  purposes  and  rent  is 
charged  as  the  price  of  idle  possession,  then  such 
forestallment  becomes  a  question  of  ethics.  Titles 
to  land  when  traced  far  enough  back  are  found  in 
their  last  analyses  to  rest  on  forestallment.  with  pos- 
sible intermediate  stages  of  Conquest  or  plunder, 
which  condition  of  acquisition  could  hardly  be  con- 
sidered valid  claims  to  ownership. 

99 


PARASITIC  WEALTH 


91 


Forty-seven  3'ears  ago  Mr.  Herbert  Spencer  clearly 
and  conclusively  proved  in  his  "Social  Statics''  that 
from  the  standpoint  of  abstract  ethics,  private  owner- 
ship of  land  is  not  justifiable.  And  foreseeing  the 
difficulties  of  reorganization  on  a  basis  of  compensa- 
tion to  present  owners,  he  says:  "To  justly  estimate 
and  liquidate  the  claims,  is  one  of  the  most  intricate 
problems  society  one  day  will  have  to  solve." 

In  view  of  the  apparent  difficulties  in  the  way  of 
the  economic  realization  of  the  abstract  rights  to  land, 
Mr.  Spencer  had  occasion  later  to  somewhat  modify 
his  views  as  to  the  practicability  or  even  desirability 
of  its  nationalization,  seeing  that  in  any  scheme  of 
just  compensation  to  land  owners,  the  interest  on  pur- 
chase money  would  probably  exceed  the  cost  of  rent. 
Mr.  Henry  George  has  found  fault  with  ?vlr.  Spencer 
for  this  change  of  front,  but  when  we  fairly  consider 
the  reasons,  we  can  hardly  blame  Mr.  Spencer  for 
believing  that  the  lot  of  the  dispossessed  would  not 
be  improved  by  simply  converting  land  rent  into 
mone}'  rent. 

Is  there  any  wonder,  in  view  of  the  doctrines  of 
Political  Science,  that  this  master  mind  of  the  century 
should  be  puzzled  over  the  apparent  discordance  be- 
tween abstract  ethics  and  practical  politics,  and  that 
he  should  be  obliged  to  say  in  his  letter  to  the  London 
Times; 


92  PARASITIC  WEALTH 

"The  reason  for  this  state  of  hesitancy  is,  that  I 
cannot  see  my  way  toward  reconciliation  of  the  ethi- 
cal requirements  with  the  politico-economical  require- 
ments." 

Had  Mr.  Spencer's  attention  been  as  vitally  drawn  to 
the  question  of  money  as  it  had  been  to  that  of  land,  it 
is  presumable  he  would  not  have  been  misled  by  the 
false  reasoning  of  economic  writers,  and  we  should 
have  had  a  corroborative  chapter  on  the  ethics  of 
usury,  instead  of  views  modified  to  meet  perverted 
social  conditions. 

A  recognized  principle  in  political  ethics  concedes 
to  man  the  right  of  life,  liberty  and  pursuit  of  happi- 
ness consistent  with  the  free  and  unrestricted  exercise 
of  similar  rights  by  all  other  men. 

From  this  principle  Mr.  Spencer  deduced  the  law 
that  "Equit}'  does  not  permit  property  in  land."  From 
the  same  principle  he  would  have  reasoned  that 
equity  does  not  permit  the  limitation  by  monopoly  of 
any  industrial  opportunity  of  man,  and  that  control  or 
possession  of  such  opportunities  constituted  an 
abridgment  of  his  rights  and  a  violation  of  justice. 

As  these  opportunities  are  used  to  wrest  tribute 
from  toil,  their  limitation  by  monopoly  is  morally 
wrong.  It  must  follow  as  a  rule  of  Political  Science 
based  on  equity,  that  incomes  derived  from  non-pro- 
ductive sources  are  unjust. 


PARASITIC  WEALTH  93 

The  ultimate  test  of  all  social  conditions,  must  be 
the  test  of  abstract  ethics.  Unless  the  conditions 
square  with  rectitude  and  morality,  they  cannot  be 
just.  Let  our  teachers  of  Political  Science  re-ex;uninc 
their  theories  and  revise  their  treatises.  If  a  tlr.ng  is 
wrong  in  essence,  the  most  subtle  arguments  of  expe- 
diency will  avail  not  to  make  it  right  in  jv.actice. 
Sophistry  and  plausible  speech  will  not  condone  a 
wrong. 

The  ethics  of  Political  Science  centers  about  the 
word  "  Services."  All  human  effort, in  its  last  analysis, 
is  a  service.  Wealth  in  its  various  forms  is  crystal- 
lized human  effort,  or  •' past  services."  Creation  of  ser- 
vices and  the  exchange  of  services,  is  the  sum  total 
of  Political  Science.  On  the  basis  of  such  ethics,  in- 
terest taking  cannot  be  justified  unless  as  a  reward 
for  actual  services  rendered.  After  money  has  been 
made  "competitive  for  investment"  by  an  expansion  of 
its  volume,  "Premium"  interest  will  cease,  but  a 
nominal  residual  charge  of  negligible  but  constant 
quantity  will  remain  as  a  service  charge,  of  which  we 
shall  speak  later. 

But  while  we  can  render  money  and  therefore 
"Capital"  premiumless,  we  cannot  make  land  rent- 
less.  Land  area  is  limited  and  cannot  be  expanded  like 
money.    It  must  therefore  be  emancipated  from  private 


94  PARASITIC  WEALTH 

control.  Premiumless  money  and  emancipated  land 
are  the  watchwords,  and  the  ''Declaration  of  Indus- 
trial Independence,''  the  motto  of  Social  Reform, 

Land  rent  seems  to  be  nothing  but  interest  on  the 
purchase  money,  and  on  money  invested  in  improve- 
ments. But  it  is  more  than  that,  land  is  a  factor  of 
production,  and  competition  for  its  use  like  competi- 
tion for  the  hire  of  money,  gives  rise  to  a ''premium." 

Limited  money  volume  bears  a  premium — Interest. 

Limited  land  area  bears  a  premium — Rent. 

Rent  and  Interest  are  the  price  society  pays  for  li- 
mitation. They  are  exactly  the  same  thing  under 
two  different  names. 

By  the  gradual  expansion  of  the  money  volume  and 
by  improved  methods  of  its  circulation,  interest  on 
money  declines  but  land  cannot  be  expanded  like 
money,  and  as  population  encroaches  upon  its  avail- 
able area,  land  premium  or  rent  advances.  If  there- 
fore, we  had  a  premiurnless  money,  land  values  would 
rise  enormously  as  compared  with  prices  of  competi- 
tive products.  Land  being  then  the  only  non-pro- 
ductive source  of  income — the  only  medium  where 
idle  possession  could  get  something  for  nothing — de- 
mand for  its  ownership  would  be  great.  The  Social 
Problem,  v.-ould  be  only  partially  solved. 

In  any  true   scheme  of  money   reform   these  twin 


PARASITIC  WEALTH  95 

evils,  interest  and  land  ownership,  must  be  abolislied 
together. 

The  value  of  land  increases  in  two  ways :  First 
by  competitive  demand  for  it,  due  to  pressure  of  popu- 
lation, and  second  by  public  and  private  improvements 
in  its  vicinitv.  Every  roadway,  boulevard,  railroad, 
canal  and  other  transportation  and  business  facilities, 
every  library,  art  gallery,  educational  institution. park, 
public  building  and  in  fact  all  manner  of  public  con- 
veniences and  improvements  that  make  life  worth 
livinir,  enhance  the  value  of  land.  Such  increase  in 
land  values  is  incidental  to  co-operative  influences, 
and  therefore  belongs  to  the  community.  x\ll  the 
people  of  the  country  contribute  directly  or  indirectly 
to  make  land  valuable,  therefore  all  the  people  sliould 
participate  in  its  benefits.  This  increased  valuation  is 
the  "economic  surplus"'  which  is  now  appropriated  by 
land  owners  to  the  great  hurt  and  injur}^  of  the  land- 
less. 

In  this  country  population  increases  at  the  rate  of 
about  three  per  cent  yearly,  therefore  the  average  land 
values  should  increase  at  the  same  rate  independently 
of  any  improvements  on  the  land,  public  or  private. 
This  fact  largely  accounts  for  the  encouragement  of 
immigration  by  the  owners  of  land.  Over-population 
is  a  curse  to  all  but  the  land  rich,  for  it  enhances  their 


96  PARASITIC  WEALTH 

wealth  and  places  the  masses  under  better  control  and 
subjugation  to  the  masters  of  the  soil. 

Rent  is  estimated  from  the  level  of  the  least  desir- 
able or  least  productive  land,  called  "no-rent''  land. 
This  is  the  level  on  which  the  "economic  surplus"  is 
drained  into  the  pockets  of  land  owners.  As  this 
level  is  forced  down  to  less  desirable  lands  by  the 
pressure  of  advancing  population,  or  by  speculative 
monopoly,  this  "economic  surplus"  increases,  and  the 
drain  on  industry  is  greater.  Let  us  not  be  misled 
by  the  childish  arguments  that  rent  does  not  affect 
the  price  of  products,  or  the  wages  of  labor.  It  is 
enough  that  it  affects  the  purse.  Rent  and  interest 
take  their  slice  out  of  productive  effort  in  a  suffi- 
ciently real  and  tangible  way.  The  capitalist  does 
not  feed  on  coin,  nor  does  the  land-lord  eat  soil. 
Thev  both,  however,  take  the  lion's  share  of  the  na- 
lion's  output. 

Rent  may  be  defined  as  follows : 

Rent  on  land  depends  upon  its  available  area  and 
the  demand  made  upon  that  area  by  competition  for 
its  use.  Rent  on  land  is  the  toll  productive  effort 
pays  to  ownership;  this  toll  advances  as  demand  for 
the  soil  increases,  and  rent,  therefore,  bears  a  defi- 
nite ratio  to  the  pressure  of  population.  Tiie  limit  to 
advancing  rent  is  that    limit  where  pressure  of   popu- 


PARASITIC  WEALTH 


97 


lation    trenches    on     the      margin    of     subsistence. 

The  available  land  area  is  fast  disappearing,  as  ad- 
vancing population  encroaches  upon  it.  and  land  spec- 
ulators obtain  control. 

In  the  Arena  for  September.  1S96.  the  Rev.  B.  \V. 
Williams  gives  some  interesting  tigures  in  regard  to 
appropriation  of  the  public  domain  to  private  monop- 
olv.  Twenty -seven  private  individuals  hold  between 
them  nearlv  twelve  millions  of  acres  of  land.  Fifty- 
six  foreign  corporations  own  more  than  twenty-sLx 
millions  of  acres  of  land  in  the  United  States,  an  area 
greater  than  the  State  of  Indiana.  With  lavish  ex- 
travagance and  recklessness  Congress  deeded  awav 
over  191  millions  of  acres  of  public  land  to  railroads 
and  other  corporations,  a  tract  nearly  as  large  as  the 
combined  area  of  France  and  Germany.  These  are 
astonishing  facts,  and  show  the  pace  at  which  expa- 
triation is  being  accomplished. 

The  level  of  desirabilitv  is  becoming  lower  and 
lower,  and  rents  are  steadily  advancing.  Land  is 
the  great  stronghold  of  non-productive  incomes,  and 
in  all  probabilitv  the  vast  fortunes  of  the  wealthy  have 
all  of  them  directly  or  indirectly  been  connected  with 
land  speculation  and  values.  Speaking  of  the  cele- 
brated classification  of  millionaires  published  by  the 
New  York  Tribune  in  June.     1S92.    Prof.    Commons 


98  PARASITIC  WEALTH 

says  in  his  book  on  the  ''Distribution  of  weahh,"that 
takino-  into  account  the  size  of  the  fortunes,  it  will 
be  found  that  perhaps  95  per  cent,  of  the  total  valuo 
is  due  to  investment  classed  as  land  values  and 
natural  monopolies,  and  industries  aided  by  such  mo- 
nopolies. But  as  in  the  case  of  money  premium,  this 
is  not  its  worst  offense.  We  might  overlook  the  ex- 
actions of  rent  on  land  and  the  vast  fortunes  made  by 
land  speculation,  if  it  left  us  otherwise  free  to  earn. 
But  land  monopoly  closes  up  the  avenues  of  agricul- 
tural employment  to  those  unable  to  purchase  land, 
and  thus  makes  unemployed  labor  competitive  and 
helpless. 

It  is  a  remarkable  fact  and  one  which  we  have 
already  noticed,  that  land  is  probably  the  chief  repos- 
itory of  savings.  Land  is  the  most  desirable  medium 
of  investment,  for  like  money  and  its  products,  it  yields 
an  income  without  productive  exertion.  It  has  the 
further  advantage  that  as  it  cannot  be  lost,  destroyed  or 
stolen,  it  is  therefore  absolutely  safe.  Naturally,  and 
by  preferment  therefore,  land  becomes  the  repository 
of  savings  and  an  instrument  for  drawing  income  from 
industrial  effort.  Our  absurdly  small  money  volume 
13'  simply  a  medium  for  effecting  the  conversion  of  one 
property  into  another  and  not  a  permanent  repository 
of  savings  as  it  should  be.    If  land  were  not  purchase- 


PARASITIC  WEALTH  9^ 

able,  money  would  either  go  into  some  useful  inclustriai 
investment  or  remain  idle  as  a  deposit  in  some  savings 
bank.  Assuming  the  volume  of  money  to  be  greatly 
in  excess  of  business  requirements,  it  would  then  com- 
pete for  in\estment  and  bring  no  interest.  It  could 
be  used  to  advantage  only  in  productive  effort  and 
would  eagerly  compete  for  all  manner  of  business  and 
industrial  investments  where  speculation  and  risk 
would  give  it  an  Insurance  interest.  It  could  be  had 
from  the  banks,  when  amply  secured,  at  par,  with  a 
nominal  charge  for  bank  services  added.  This  ser- 
vice charge  would  be  as  a  compensation  for  the  care 
and  responsibility  of  safe-guarding  the  money  against 
loss,  the  exercise  of  judgment  and  discretion  in  effect- 
ing riskless  loans,  and  all  the  legal,  clerical  and  other 
necessary  expenses  connected  with  money  transac- 
tions. Such  charge  for  bank  services  would  become 
recognized  as  the  price  of  money  hire.  In  the  case  of 
rents  on  dwellings  and  other  buildings,  machine  plants, 
etc.,  this  residual  charge  will  probably  be  included  as 
money  hire.  The  balance  of  the  rent  will  of  course  con- 
sist of  cost  of  maintenance  and  superintendence.  The 
use  of  propert}',  causes  deterioration  and  this  waste 
must  be  covered  by  cost  of  repairs  and  maintenance 
which  is  a  natural  and  just  charge.  Thus  "rent''  on 
Capital  resolves  itself  into  services. 


rOO  PARASITIC    WEALTH 

Under  such  a  money  system  productive  effort  would 
receive  a  stimulus  it  never  had  before.  With  land 
speculation  closed,  money  would  seek  investm.ent  in 
productive  undertakings  and  enterprises.  With  land 
rent  equalized  and  money  rent  neutralized,  numerous 
industries  and  undertakings  would  spring  up  that  had 
no  chance  in  the  race  before. 

Labor  freed  from  the  galling  yoke  of  industrial 
slavery  would  take  fresh  courage  and  acquire  a  dig- 
nity and  independence  it  never  before  possessed. 


CHAPTER  VI. 

Let  us  retrace  our  arguments : 

We  assumed,  that  if  our  present  social  conditions 
were  right,  the  wealth  distribution  would  be  found  to 
be  just,  but  if  the  distribution  were  not  just,  then  the 
conditions  could  not  be  right.  We  showed  the  curves 
of  wealth  and  incomes,  estimated  independently  b}- 
tive  different  competent  writers.  We  found  the  dis- 
parities of  well-being  so  great  as  to  leave  no  doubt  in 
the  mind  that  some  great  economic  wrong  lay  at  the 
root  of  our  social  miseries.  We  traced  this  wrong  to 
the  monopoly  of  the  two  great  factors  of  production — 
money  and  land.  In  money,  and  not  "capital,'"  we 
identified  the  active  factor  of  production,  and  to  its 
limitations  we  traced  the  emergence  of  interest ;  to 
its  derangements  we  traced  our  panics  and  hard 
times.  We  found  that  the  money  function  conferred 
its  premium  prerogatives  on  its  offspring  wealth.  We 
found  that  the  "quantitv  theorv  "  of  monev  and  the 
"capital"'  theory  of  interest  misled  writers  as  to  the 
true  nature  of  usury.  We  found  that  the  velocity 
of  money  movement  had   probably  reached   its   limit, 

and    that    no    improvement    in    circulation    could    be 

lol 


102  PARASITIC    WEALTH 

looked  for  except  through  the  expansion  of  the  money 
volume  to  meet  the  demands  of  social  and  material 
advancement  in  the  future.  We  discussed  the  metal 
basis,  and  found  it  unsuitable  and  unsatisfactory  as  a 
money  medium,  and,  in  fact,  dangerous.  We  exam- 
ined the  ethics  of  usury,  and  found  that  charge  for 
money  hire  had  no  warrant  in  equity,  unless  based  on 
actual  productive  service.  We  examined  the  ethics 
of  land  ownership,  and  found  that  its  limitations,  like 
that  of  money,  gave  rise  to  a  premium  called  rent; 
that  while  money  could  be  rendered  premiumless  by 
expanding  its  volume,  land  could  not  be  made  rentless 
by  the  same  means,  and  therefore  should  be  emanci- 
pated from  private  ownership,  and  its  benefits  equal- 
ized. We  concluded  that  any  radical  improvement 
in  money  reform  must  include  land  emancipation. 
We  indulged  in  a  speculation  as  to  the  effect  on  indus- 
trial production  of  an  expanded  money  volume  un- 
able to  take  refuge  in  land  investment. 

Can  we  realize  such  conditions  practically  ?  We 
certainly  can.  Paradoxical  as  it  may  appear,  out  of 
two  evils  we  may  produce  a  good — out  of  two  wrongs 
make  a  right,  and  all  th;il  without  violating  any  prin- 
ciple of  justice. 

To  be  an  ideal  currency,  our  money  must  possess 
the  following  properties:  it  i.j.-t  be: 


PARASITIC  WEALTH  IqJ 

A  money  of  final  payment  and  uniform  power  in  ex- 
change. 

A  money  of  unassailable  security. 

A  money  of  unchallenged  value. 

A  money  of  unquestioned  stability  and  permanence. 

A  money  of  sufficient  volume  to  be  premiumless. 

What  fountain  source  of  exhaustless  wealth  can  it 
be  that  promises  such  guarantees  of  stability  and 
value?  The  answer  has  no  doubt  been  anticipated. 
What  else  could  it  be  but  land? 

Land  value  or  the  economic  surplus  in  the  United 
States  ma}-  be  estimated  at  about  30  billions  of  dollars. 
This  does  not  of  course  include  the  value  of  improve- 
ments, such  as  structures  and  buildings.  Nearly  all 
of  this  land  valuation  is  novv'  in  possession  of  private 
individuals  and  corporations.  This  valuation  is  con 
stantly  appreciating  and  will  never  have  a  tendency 
to  depreciate  except  through  race  decadence.  Its 
value,  stability  and  permanence  therefore  rests  on  the 
persistence  of  the  race  itself. 

I\Ione\'  based  on  land  values  and  of  ample  volume 
cannot  be  '"cornered"  and  otherwise  manipulated  b\- 
speculators,  as  our  gold  coin  and  bullion  have  been. 
It  is  not  subject  to  any  lluctuations  of  value  to  upset 
commerce  and  cause  panics.  As  the  source  of  all 
wealth,  the  value   of  land   as   a   money   basis   stands 


104  PARASITIC  WEALTH 

unchallenged.  It  is  always  in  evidence,  always  in 
demand,  it  cannot  be  lost,  stolen  or  destroyed,  and 
possesses,  therefore  all  the  desirable  qualifications  of 
a  true  and  ideal  basis  of  value. 

How  shall  we  emancipate  this  land  from  private 
ownership  on  principles  of  fair  compensation,  and 
convert  it  into  money  of  circulation  ?  Very  easily  in- 
deed. The  people  of  the  United  States  will  simply 
agree  to  pool  their  interests  in  the  use  of  the  earth. 
The  individual  owners  will  agree  to  transfer  their 
land  to  the  collective  people  of  the  United  States  on 
condition  that  the  collective  people  issue  to  the  indi- 
vidual owners  receipts  or  certificates  to  the  full  and 
just  value  of  their  holdings.  The  United  States  to 
declare  these  certificates  to  be  the  constitutional 
money  of  the  country — the  lawful  money  of  ultimate 
payment  receivable  for  all  debts,  public  and  private. 
All  metals  heretofore  used  as  money  to  be  declared 
demonetized  by  law.  The  United  States  to  redeem 
its  metal  currency  at  par  in  the  lawful  money  of  the 
land,  if  presented  within  a  certain  limited  time,  the 
bullion  to  be  sold  in  the  open  market  for  whatever  it 
may  bring.  All  its  paper  obligations  to  be  redeemed 
in  the  law^ful  money  and  cancelled. 

We  will  thus  at  once  possess  a  currency  backed  by 
pledges  and  guarantees  of  unchallenged  value,  of  un- 
assailable permanence  and  stability. 


PARASITIC  WEALTH  IO5 

How  shall  we  regulate  the  value  of  this  money? 
Simply  by  making  "land  value"   the    Standard   of 
"exchange  value";  the  ''Money  Reform  Dollar"'  will 

read  about  as  follows : 

UNITED  STATES  OF  AMERICA. 
A  LIEN  ON  THE  USE  OF  THE  PUBLIC  DOMAIN, 

IN  THE  SUM  OF  ONE  DOLLAR. 
LEGAL  TENDER  FOR  ALL  DEBTS  PUBLIC 
AND  PRIVATE. 
The  value  of  the  dollar  will  be  definitely  fixed  by 
its  renting  power.  The  average  price  of  land  in  the 
United  States  exclusive  of  improvements  upon  it,  is 
about  $14.00  per  acre.  If  the  land  yields  in  rent,  say 
five  per  cent.net  at  the  present  price  level,  then  one 
acre  of  average  land  will  rent  for  70  cents  per  year. 
Seven  dollars  of  our  present  gold  standard  money  will 
therefore  rent  ten  acres  of  average  land.  If  seven 
"  Reform  Money"  dollars  will  likewise  when  presented 
rent  ten  acres  of  average  land,  then  the  purchasing 
power  of  the  reform  money  will  be  the  same  as  that 
of  the  present  currency.  The  reform  dollar  will  then 
purchase  the  same  quantity  of  goods  as  the  gold 
dollar,  and  their  power  in  exchange  will  be  equal. 
The  value  of  the  reform  dollar  will  not  depend  so 
much  on  their  number  as  upon  their  renting  power, 
and  as  tax  now  takes  the  place  of  rent,  the  tax  rate 
on  land  will  determine  exactly  the  value  of  the  reform 


I06  PARASITIC  w];altii 


dollar.  If  tax  rates  are  high,  more  dollars  will  be 
required  to  rent  ten  acres  of  land,  an.d  the  dollar  will 
buy  less  goods;  if  the  tax  rates  are  low.  less  dollars 
will  be  required  to  rent  ten  acres  of  land,  and  the 
dollar  will  purchase  more  goods.  The  value  of  the 
reform  dollar  is  entirely  a  matter  of  the  land  tax.  It 
m.av  be  well  to  state  here  that  all  taxation,  save  that 
on  land,  is  a  violation  of  the  rights  of  private  prop- 
erty. The  government  oversteps  its  true  functions 
when  it  levies  a  toll  on  human  effort,  and  it  can  not 
be  justihed  in  doing  so  on  any  grounds  of  equity. 
Land,  as  we  have  said,  is  man's  natural  opportunity, 
the  limitation  of  which  by  private  ownership  works 
injustice  and  hardship  on  the  landless.  Right  here  is 
the  real  and  true  excuse  for  a  government.  Tiie 
State  should  not  only  be  a  policeman,  but  the  arbiter 
of  fair  play.  It  should  not  only  "restrain  men  from 
injuring  one  another"  physically  and  socially,  but  like- 
wise industrially.  In  all  natural  and  industrial  oppor- 
tunities the  State  should  step  in  as  umpire  to  equalize 
benefits,  and  this,  in  the  case  of  land,  is  its  only  warrant 
for  imposing  a  land  tax.  As  rem s  cannot  be  abolished, 
the  State  collects  them  for  liie  people  and  applies 
them  for  the  public  good.  It  performs  the  useful 
function  of  equalizing  the  benefits  of  land  tenure. 
The  same   argument  applies   to    die   money  question. 


PARASITIC    WEALTH  IO7 

One  of  the  most  surprising  propositions  is  that  which 
advocates  leaving  the  issue  of  the  people's  money  to 
private  eftterprise.  Here  is  a  vital  factor  of  produc- 
tion to  be  left  to  the  vicissitudes  of  private  speculation 
and  profit!  A  most  essential  and  important  State 
function  to  be  surrendered  to  individuals!  Of  course 
the  proposition  is  on  a  par  v^'ith  our  present  theories 
of  money  and  our  barbaric  commodity  currency.  Pri- 
vate issue  and  control  of  money  is  the  source  of  great 
hardship  and  oppression  to  the  people,  but  it  is  a 
boon  and  source  of  profit  to  individuals.  Like  land, 
money  must  be  forever  emancipated  from  private  con- 
trol and  speculation. 

It  is  entirely  within  the  legitimate  sphere  of  the 
people's  government  not  only  to  issue  its  money,  but 
to  establish  mercantile  and  savings  banks  and  to 
transact  all  the  riskless  financial  business  of  the  coun- 
try at  the  actual  cost  for  banking  services.  As  pre- 
vailing bank  rates  of  interest  determine  what  capital 
shall  exact  from  industry  for  its  hire,  the  great  im- 
portance of  establishing  such  a  rate  at  its  actual  cost 
of  bank  service,  becomes  apparent.  The  people  sim- 
ply pool  their  financial  issues,  and  resolve  themselves 
into  a  "bank  trust.''  The  volume  of  mercantile  bus- 
iness is  constantly  increasing  and  if  healthy  conditions 
prevailed  should  this  year  show  a  movement  of  some- 


I08  PARASITIC    WEALTH 

thing  like  75  to  80  billions  of  dollars.  If  the  banking 
charge  for  transacting  this  amount  of  business  aver- 
ages one  tenth  of  one  per  cent.,  the  gross  yearly  re- 
ceipts would  foot  up  from  75  to  80  millions  of  dollars, 
which  should  be  far  in  excess  of  any  possible  expense 
of  a  very  elaborate  system  of  banking  institutions. 
The  Savings  banks  should  receive  the  people's  money 
for  a  small  charge  and  guarantee  absolute  safety  to 
the  deposits.  This  money  could  be  loaned  for  a  very 
small  bank  service  rate  on  proper  security.  It  is  pre- 
sumable that  such  a  rate  would  fall  considerably  be- 
low the  half  of  one  per  cent.  This  rate  would  con- 
stitute a  legitimate  charge  for  legal,  clerical  and  other 
bank  services.  All  capital  would  claim  the  right  to 
collect  for  such  a  charge,  apart  from  its  cost  of  main- 
tenance and  superintendence.  It  is  of  course  under- 
stood that  the  establishment  of  these  national  insti- 
tutions should  carry  with  it  no  restriction  on  private 
enterprise.  If  private  banks  can  serve  the  people 
better  than  public  institutions  they  should  be  encour- 
aged and  not  placed  at  any  disadvantage. 

Indeed  we  cannot  dispense  with  private  banks,  for 
they  will  be  useful  where  risks  are  involved  and  where 
speculati\c  enterprises  aid  the  industrial  movement. 
Such  risks  of  course  carry  with  them  an  insurance 
premium.      It  has  been   explained,    that   "monc}'  re- 


PARASITIC  WEALTH  IO9 

form"  does  not  contemplate  the  discontinuance  of  in- 
surance or  risk  premium  on  money  or  property,  but  a 
premiumless  money  will  uniformly  reduce  the  risk 
rates  to  the  full  extent  of  bank  rates  formerly  charged 
for  money  hire  where  no  risk  was  involved. 

All  money  received  at  the  peoples'  banks  should  be 
destroyed,  and  new  bills  issued  in  its  place  so  as  to 
maintain  the  circulation  clean  and  bri<;ht. 

The  issue  of  money  is  most  certainly  a  State  func- 
tion. If  ever  there  can  be  an  urgent  demand  for  a 
Government,  it  is  to  establish  money,  and  do  what 
private  enterprise  has  never  done  and  cannot  do, 
divorce  it  from  speculation  and  profit,  and  make  it 
premiumless. 

The  State  has  done  about  everything  it  could  do  in 
violation  of  its  true  functions,  and  has  left  undone 
about  everything  it  should  do  within  the  legitimate 
scope  of  its  duty. 

If  the  issue  of  money  is  not  a  legitimate  function  of 
the  government  then  it  has  no  legitimate  function,  and 
had  better  go  out  of  business.  If  the  issue  and 
control  of  money  be  left  to  private  enterprises, 
everything  else  may  be  left  to  private  enterprise. 
The  vigilance  committee  will  protect  the  people, 
— Judge  Lvnch  will  keep  order,  and  the  other  public 
functions  will  be  carried  on  by  private  enterprise  for 


no  PARASITIC    WEALTH 

private  gain  and  profit.      Individualism  will  run  riot. 

We  can  hardly  be  worse  off  without  a  government 
than  with  one  continually  interfering  with  commerce 
and  industry  by  a  vicious  and  discriminating  class 
legislation  based  on  a  degrading  paternalism.  We 
are  cursed  with  too  much  legislation  and  too  much 
government.  Its  functions  are  daily  growing  more 
complex,  more  corrupt  and  more  expensive.  We  will 
do  well  to  heed  the  words  of  one  of  the  greatest 
statesmen  of  the  century : 

"A  wise  and  frugal  government,  which  shall  re- 
" strain  men  from  injuring  one  another;  shall  leave 
"them  otherwise  free,  to  regulate  their  own  pursuits 
"of  industry  and  improvements,  and  shall  not  take 
"from  the  mouth  of  labor  the  bread  it  has  earned; 
"this  is  the  sum  of  good  government." 

(Thomas  Jefferson — First  Inaugural). 

It  thus  appears  that  the  equalizing  function  of  the 
State  is  its  ethical  warrant  for  the  collection  of  the 
land  tax  and  that  such  exercise  of  taxing  power  works 
in  the  interest  of  justice  and  prevents  the  spoliation  of 
one  class  by  the  other.  It  further  appears  that  the 
purchasing  power  of  the  Reform  Dollar  is  simply  a 
matter  of  the  tax  rate  and  under  perfect  control  of  the 
people.  All  values  in  exchange  are  thus  referred  to 
the  tax  rate  as   a  standard,    and   whether  the    dollar 


PARASITIC    WEALTH  III 

purchases  much  or  little  of  the  competitive  products, 
will  depend  on  how  much  land  it  will  rent. 

If  the  land  values  in  the  United  States  amount  to  30 
billions  of  dollars,  and  if  they  have  been  yeilding  six 
per  cent.net  income  in  rent,  then  in  order  that  the 
reform  dollar  should  maintain  exactly  the  same  pur- 
chasing power  as  the  Standard  gold  dollar,  the  assess- 
ment should  be  made  on  the  same  basis.  The  land 
tax  in  theorv  would  therefore  yield  on  that  basis  1800 
millions  of  dollars  per  year.  But  practically  the  net 
vield  would  fall  considerably  below  this  estimate,  for 
all  land  held  speculatively  would  be  at  once  released, 
and  people  would  occupy  only  what  they  actually 
needed.  This  would  set  free  vast  tracts  of  valuable 
but  unoccupied  land  for  cultivation,  and  probably 
millions  of  families  would  now  take  up  agricultural 
land  at  a  rental  who  could  not  heretofore  purchase. 
This  would  at  once  relieve  the  congested  condition  of 
the  cities  wliere  rents  would  decline.  The  relief  thus 
offered  to  competitive  labor  in  the  overcrowded  trades 
and  occupations  would  be  very  beneficial.  Productive 
efficiency  would  be  increased,  and  the  rate  of  wages 
would  therefore  naturally  advance. 

The  intelligent  reader  will  not  be  apt  to  confound 
the  proposed  money  reform  with  the  "Real  Estate 
Loan  Association"  scheme   of  John    Law.  nor  will  it 


112  PARASITIC  WEALTH 

be  necessary  to  say  that  the  reform  money  has  noth- 
ing in  common  with  the  notorious  French  "  Assignat/' 
This  absurd  financial  scheme  was  not  a  land  emanci- 
pation reform,  but  a  political  measure  for  distributing 
confiscated  church  property  and  to  replenish  an  ex- 
hausted treasury.  The  assignat  was  a  sort  of  interest 
bearing  bond,  based  on  church  real  estate.  With 
criminal  recklessness  these  paper  obligations  were 
multiplied  until  they  were  inflated  to  ten  times  the 
value  of  the  estates  they  represented,  with  the  natural 
result — bankruptcy. 

To  satisfactorily  and  practically  put  the  proposed 
Money  Reform  into  operation  will  require  great  judg- 
ment and  wisdom  and  much  work,  but  once  launched  it 
will  be  an  enduring  fimancial  reform.  In  order  to  re- 
deem  the  metal  coins  and  paper  obligations  of  the  gov- 
ernment at  their  par  value,  the  new  reform  money  must 
have  the  same  purchasing  power  as  the  gold  stand- 
ard, and  the  tax  rate  must  therefore  approximate  the 
rent  rate  as  closely  as  possible. 

No  discretionary  powers  must  be  given  to  congress 
in  regard  to  the  issue  of  money  except  wathin  the  lim- 
its of  a  well  defined  constitutional  lav/,  unless  by  con- 
sent of  the  people  through  the  Referendum.  The 
money  must  be  issued  v.ithin  certain  prescribed  rules 
at  a  per  capita  rate,  that  rate  to  be  constantly  main- 


PARASITIC  WEALTH  II3 

tainecl  and  never  exceeded.  The  lax  rate  must  also 
be  clearly  defined  by  law  on  a  basis  of  "population 
density"  and  ••improvement  valuation''  within  the 
district  taxed. 

The  money  may  be  printed  and  engraved  by  meth- 
ods of  such  elaboration  and  refinement,  and  on  special 
fabrics,  requiring  such  difiicult  and  complicated  pro- 
cesses to  reproduce  that  counterfeiting  could  not  be  un- 
dertaken without  a  most  elaborate  plant  and  very 
expensive  appliances,  leading  to  immediate  detection. 

A  sudden  issue  of  so  great  a  volun:ie  of  money  as 
v,^ould  liquidate  the  claims  of  land  owners  could  not 
be  undertaken  witnout  financial  dissipation,  and  a 
profound  disturbance  of  the  price  level.  Mone}'  would 
seek  goods  on  a  short  and  unprepared  market,  and 
prices  would  temporarily  advance  very  much.  Goods 
must  have  time  to  overtake  the  money  volume  seek- 
ing them,  and  become  competitive.  All  undue  stim.- 
ulation  of  trade  is  hurtful,  and  must  be  avoided,  as  it 
leads  to  eras  of  spasm.odic  prosperity,  extravagance 
and  wild  speculation,  and  winds  up  in  ultimate 
financial  collapse.  We  here  expect  to  accomplish  by 
reform  within  a  few  years,  what  should  have  come  to 
us  as  a  natural  heritage  of  centuries  of  growth  and 
development.  The  financial  innovation,  therefore, 
must  be   introduced  on  the  conservative  lines  of  far 


114  PARASITIC  WEALTH 

sighted  judgment  and  wisdom.  The  issue  should 
take  place  very  slowly  and  in  small  installments  to 
maintain  an  economic  equilibrium  between  a  stimu- 
lated money  circulation  and  competitive  products 
seeking  it.  It  should  be  a  gradual  process  of  some 
years,  so  that  the  enormous  spur  given  to  commerce 
and  industry  v/lll  not  lead  to  reckless  extravagance 
among  the  people.  It  should  be  clearly  understood 
that  an  augmented  money  volume  need  not  imply  a 
greater  circulation.  We  may  have  ten  times  as  great 
a  volume  of  money  as  at  present,  and  circulate  it 
only  one-tenth  as  fast,  or  we  may  use  onlv  one-tenth  of 
it  and  let  the  other  nine-tenths  remain  idle. 

But  there  is  no  doubt  that  the  reform  money  will 
give  industry  a  great  impetus,  increase  the  productive 
output,  and  correspondingly  increase  the  consumption 
of  goods.  There  will  be  an  enlarged  money  circu- 
lation on  an  enlarged  market,  for  all  labor  will  be 
fully  employed,  and  both  the  demand  for  the  com- 
forts of  life  and  the  supply  of  these  comforts  will  be 
greatly  augmented. 

Long  looked  for  prosperity  will  have  come  at  last, 
and  the  social  well-being  will  be  without  any  limit 
except  that  of  productive  efficiency. 

What  will  be  the  effect  on  interest  of  so  large  a 
volume  of  money  .^ 


PARASITIC  WEALTH  II5 

Where  we  had  "propertied"  men,  we  will  now  have 
"'moneyed"  men,  and  banks  will  overflow  with  the 
savings  of  thrift.  Money  will  nov/  have  become  the 
repository  of  savings.  It  cannot  take  refuge  in  land 
investment  and  draw  income,  for  speculation  in  land 
is  forever  closed ;  it  must  either  go  into  improvements 
and  buildings  or  other  productive  effort,  or  it  must 
lie  idle  in  banks.  There  will  be  more  money,  ten 
times  over,  than  undertakings  and  enterprises  seeking 
it, and  consequently  it  will  bring  in  no  revenue.  Nine- 
tenlhs  of  it  will  lie  idle  in  banks — the  dollar  will  have 
a  long  needed  rest.  Commercial  banks  will  now  re- 
quire compensation  from  depositors  for  clerical  and 
other  expenses  connected  with  money  movements, 
and  even  savings  banks  guaranteeing  absolute  secur- 
ity to  deposits  would  really  be  entitled  to  some  nomi- 
nal recompense  for  safe  guarding  the  people's  cash. 
Instead  of  a  horde  of  idle  money  getters  exacting 
tribute  from  industry  by  land  rent  and  money  rent, 
we  will  have  men  honestly  earning  their  living  in 
some  calling  useful  to  society.  The  dollar  they  earn 
will  represent  a  dollar's  worth  of  servies  rendered. 
The  day  for  getting  something  for  nothing  will  have 
passed.  Industries  and  business  enterprises  will  com- 
pete with  each  other  for  capable  men,  and  labor  for 
the  first  time  in  the  history  of  the  world  will  get  its 


Il6  PARASITIC    WEALTH 

just  due.  The  farmers  of  the  country  who  more  than 
any  other  class  have  suffered  from  vicious  tariff  legis- 
lation, will  benefit  immensely  by  land  emancipation. 
They  will  not  only  have  their  land  but  its  value  in 
money  too,  and  their  tax  rates  will  be  no  more  than 
now.  The  first  effect  of  the  money  reform  will  be  a 
general  liquidation  of  debts  and  mortgages  and  then 
vv'ill  follow  an  era  of  prosperity  and  progress  never 
before  equalled  in  the  history  of  civilization.  We 
may  expect  a  social  development  exceeding  the  wild- 
est dreams  of  reformers  and  a  national  growth  and 
advancement  equally  great. 


CHAPTER  VII. 

We  lack  the  cohesion  of  race,  habits  and  religion. 
We  lack  the  bonds  of  a  common  purpose  in  our  in- 
dustrial and  social  life.  We  are  an  aggregation  of 
different  nationalities,  heterogeneous  in  tastes,  habits 
and  religous  beliefs,  a  polyglot  nation,  each  national 
component  striving  to  perpetuate  its  language  and 
customs  on  this  common  soil.  Our  disparities  make 
us  weak  and  assailable  as  a  nation — in  a  word  we 
lack  cohesion. 

But  collective  ownership  of  the  public  domain  will 
harmonize  all  differences  and  weave  into  the  warp  of 
our  disparities  the  weft  threads  of  a  common  interest 
and  destiny,  uniting  us  into  a  national  bond  of  great 
strength  and  cohesion.  Citizenship  will  acquire  a 
new  dignity,  and  patriotism  enlarged  duties  and  obli- 
gations. But  lest  we  make  this  country  a  haven  of 
refuge  for  the  degraded  and  depraved  of  other  coun- 
tries— the  dumping  ground  for  European  offal  and 
refuse,  we  must  control  immigration.  We  must  set 
an  exalted  estimate  on  American  citizenship  and  hold 
the  test  of  fitness  to  the  mark.    Our  immigration  laws 

must  be  eminently  selective. 

117 


II 8  PARASITIC  WEALTH 

It  becomes  a  patriotic  duty — a  matter  of  National 
self-preservation —  that  all  race-degrading  and  deter- 
iorating influences  be  kept  out  of  the  country.  We 
have  enough  of  our  own  depravity  and  worthlessness 
to  take  care  of,  and  it  will  require  a  few  generations 
to  fully  assimilate  and  elevate  what  raw  material  of 
native  and  foreign  debasement  and  incompetency  we 
now  have  in  our  midst.  It  is  the  duty  of  every  na- 
tion to  aspire  to  race  supremacy,  to  raise  its  level  of 
comfort  and  living  to  the  highest  possible  standard, 
and  to  elevate  those  falling  below  the  mark.  By  such 
race  emulation  and  rivalry,  the  general  well-being 
and  happiness  of  mankind  will  be  best  conserved. 

The  criterion  of  material  advancement  is  a  high 
plane  of  living,  and  this,  in  fact,  is  a  sign  of  produc- 
tive efficiency.  The  test  of  naturalization  should  not 
only  be  selective  as  to  morality,  but  also  as  to  self- 
support.  The  ignorant  and  inefficient  are  an  undesir- 
able element  in  any  community.  The  lower  the 
scale  of  intelligence  and  greater  the  incompetency, 
the  more  numerous  the  breed ;  the  higher  the  intelli- 
gence and  ability,  the  fewer  but  more  select  the  off- 
spring. Reckless  propagation  is  a  menace  to  the 
continued  well-being  of  any  country.  Over-popula- 
tion is  a  curse,  and  he  is  the  greatest  benefactor  of 
mankind    who  teaches   it    procreative  restraint,   and 


PARASITIC    WEALTH  IIQ 

raises  its  plane  of  living.  If  parental  responsibility 
carries  with  it  the  high  ideal  of  qualitv  instead  of 
quantity  in  offspring,  trained  efficiency  instead  of  ne- 
glected education,  then  the  millenium  will  be  in 
sight.  Look  at  India.  All  who  have  read  of  the 
horrors  of  plague  and  famine  in  this  unfortunate  land 
of  early  marriages  and  low  plane  of  efficiency  and  liv- 
ing, need  not  wonder  that  some  twenty  millions  of 
this  criminally  prolific  people  must  die  of  starvation 
this  year.  Ignorance,  incompetency  and  over  popu- 
lation have  done  it.  Nor  will  economic  reform  afford 
permanent  relief  to  such  people,  for  any  social  ameli- 
oration will  at  once  be  met  and  overtaken  by  a  reck- 
less increase  in  population,  which  nothing  but  the 
starvation  limit  will  check. 

The  limit  of  subsistence  is  the  lowest  plane  of  com- 
fort and  decency  on  which  a  people  will  agree  to  live 
and  rear  families.  According  as  people  increase  in 
intelligence  and  efficiency,  this  plane  of  living  is 
raised,  and  consequently,  in  times  of  distress,  the 
plane  of  life  of  such  communities  does  not  descend  to 
the  low  level  of  starvation  and  disease.  But  these 
people  are  satisfied  to  live  on  a  plane,  in  comparison 
with  which  our  paupers  are  in  affluence.  Can  we 
wonder  then  that  a  local  famine  will  work  so  much 
distress? 


I20  PARASITIC  WEALTH 

The  plane  of  living  is  the  criterion  of  a  nation's 
civilization,  and  marks  the  difference  between  a 
superior  and  an  inferior  race.  If  the  nationalities  of 
the  earth  were  arranged  into  a  curve  of  productive 
efhciency,  it  would  be  found  that  the  level  of  comfort 
and  plane  of  civilization  fall  within  the  same  curve. 
The  great  problem  of  civilization  is  therefore,  how  to 
raise  the  standard  of  comfort,  or  more  corrcctl}^  speak- 
ing, to  raise  its  productive  efficiency.  '' Pauper"  labor 
is  worth  only  pauper  wages  because  of  its  inferiorit}' 
and  inefficiency.  It  goes  to  the  poor  house.  Under 
healthy  economic  conditions  all  labor  has  its  opportun- 
ity and  can  get  employment,  but  the  inefficient  labor 
though  cheap,  will  not  be  sought  for  as  eagerly  as 
efficent  labor  though  dear.  The  competition  is  for 
the  best,  and  the  more  efficient  will  obtain  the  great- 
er reward. 

We  have  found  that  our  average  productive  effici- 
ency, taking  Mr.  Waldron's  estimate,  is  about  two 
dollars  per  day  per  worker.  This  efficiency  is  prob- 
ably from  tvv'enty-five  to  forty  per  cent,  higher  than 
that  of  English,  French  or  German  workers,  and  so 
down  the  gamut  of  nationalities  until  we  reach  the 
low  level  of  efficiency  among  the  Chinese  and  Hin- 
dus. 

Dur  level   is  two   dollars.     Why  not  three?     The 


PARASITIC    WEALTH  121 

author  sees  no  reason  why  changed  conditions  alone 
should  not  advance  our  prosperity  to  that  level  within 
a  presidential  term.  There  is  no  valid  reason  why 
we  cannot  double  our  productive  capacity  within  an- 
other decade  under  conditions  of  economic  justice  and 
fair-play. 

What  must  be  the  condition  of  material  advance- 
ment? Commercial  and  industrial  freedom.  Tariffs 
and  meddlesome  paternalism  must  go.  Restrictions 
on  commerce  and  industry  must  be  abolished. 

Two  great  political  superstitions  have  dominated  the 
mind  of  American  workmen  as  the  result  of  abnormal 
and  perverted  economic  conditions.  One  is.  that  labor 
saving  machinery  and  improved  processes  of  produc- 
tion rob  us  of  employment,  and  the  other,  that  the  so- 
called"  Protection"  by  tariff  tax  increases  employment. 
NothiniT  could  be  more  wide  of  the  truth.  Statistics 
show  that  nearly  twice  as  many  workers  per  capita 
were  engaged  in  the  manufacturing  industries  in  1890 
as  were  employed  per  capita  in  1850.  and  the  capital 
invested  in  these  industries  per  capita  in  1890  was 
nearly  five  times  as  great  as  in  1850,  showing  quite 
conclusively  that  labor  saving  machinery  and  processes 
have  not  closed  the  avenues  of  employment. 

But  what  shall  we  say  of  that  pitiful  plea  of  nation- 
al incompetency — that  humiliating  confession  of  weak- 


122  PARASITIC    WEALTH 

ness  and  incapacity  which  cries  out  aloud  for  help  and 
"Protection?"  Do  the  strong  and  capable  need  pro- 
tection ?  The  word  should  be  beneath  the  contempt 
of  every  self  respecting  American  who  believes  in 
manliness  and  self-reliance. 

Protection  against  what?  Is  it  against  "Pauper"' 
labor?  We  are  importing  it  as  fast  as  the  steam-ship 
lines  can  carry  it  to  these  shores.  It  brings  with  it  its 
native  incompetency  and  degradation  and  tills  our 
poor-houses  and  pauper  institutions. 

What  then  is  the  protection  for?  Simply  to  "pro- 
tect" the  people  from  buying  at  natural  market  rates 
what  they  now  must  purchase  at  monopoly  rates.  It 
is  not  protection  but  black-mail. 

According  to  the  investigations  of  the  New  York 
Tribune  in  1892,  to  account  for  the  great  fortunes 
of  the  millionaire  class,  the  statements  abundantly 
prove  that  about  28  per  cent,  of  the  immensely  rich 
obtained  their  wealth  from  protected  industries.  Pro- 
tection means  a  monopoly.  We  have  seen  that  the 
natural  monopolies  of  Capital  and  Land  have  caused 
enormous  disparities  of  wealth,  but  not  content  with 
these  instruments  of  exaction,  we  must  create  a  special 
monopoly  and  call  it  "protection,"  to  assist  the  pro- 
cess. 

The  tariff  is  a  restriction.    It  says  to  commerce  and 


PARASITIC  WEALTH  123 

industry  :••  we  want  less  wealth."     It  says  to  human 
effort:  ''we  want  less  efficiency." 

If  trade  confers  no   benefit   on    man    it    should    be   . 
stopped.       If    it  does   not  increase  the  efficiency    of 
human  effort,  it  should  be  discontinued. 

The  theory  of  protection  is  the  belief  that  by  tariff 
restrictions  vvc  encourage  the  development  of  home 
industries,  and  that  home  competition  is  a  guarantee 
of  ultimate  low  prices ;  that  by  protection  we  encour- 
age home  labor  as  against  foreign  labor,  in  fact  we 
get  the  better  of  the  foreigners  at  every  point.  Osten- 
sibly we  are  doing  this,  but  in  reality  it  works  very 
much  like  the  patent  water-gas  stove  of  many  years 
ago,  which  was  advertised  to  make  its  own  gas  from 
water,  and  to  require  no  other  fuel.  It  did  make  its 
own  gas  from  water,  but  at  the  expense  of  its  iron, 
and  consumed  itself  chemically  in  the  process  of  burn- 
ing. So  with  these  protected  industries ;  they  thrive 
on  the  national  substance  ;  they  flourish  at  the  people's 
expense. 

Trade  cannot  be  made  one-sided ;  it  must  be  recip- 
rocal in  its  benefits.  By  trade  res'trictions  we  pun- 
ish the  foreigner  and  we  punish  ourselves  equally. 
He  cannot  trade  with  us  so  as  to  get  cheaply  what 
costs  him  dearly  to  produce  and  give  us  in  return 
cheaply  what  costs  us  dearly  to  produce.     It  hinder§ 


124  PARASITIC  WEALTH 

the  exchange  of  benefits.      It  makes  human  effort  less 
effective  and  is  a  loss  of  wealth. 

When  it  once  becomes  clear  to  the  American  work- 
man that  legislative  restrictions  can  add  nothing 
to  our  wealth,  but  that  they  can  and  do  divert  money 
from  pockets  where  it  belongs  into  pockets  where  it 
does  not  belong ;  when  he  understands  that  tariff  laws 
divert  labor  from  natural  and  productive  channels  in- 
to artificial  and  unproductive  channels,  and  that  they 
make  continued  employment  contingent  on  these  arti- 
ficial props,  which  when  removed  throw  labor  out  of 
work,  then  perhaps  he  will  no  longer  listen  to  the 
seductive  arguments  of  the  monopolist. 

Like  interest  on  capital  and  the  land  monopoly, 
these  restrictions  on  trade  exact  a  tribute  from  indus- 
trial effort.  The}'  close  up  the  avenues  of  employ- 
ment, make  labor  competitive,  and  place  it  at  the 
mercy  of  the  monopolist. 

Make  money  premium-less,  emancipate  land,  and 
abolish  all  trade  restrictions  and  you  open  up  three 
great  avenues  of  employment  now  guarded  by  mon- 
opoly. When  these  are  thrown  open,  labor  will  be 
emancipated  from  industrial  slavery.  Work — endless, 
infinite  work — will  be  a  drug  competing  for  men  to 
do  it.  We  will  then  be  as  anxious  for  the  foreigner 
to  do  it,  as  we  are  now  that  he  should  not  do  it. 


PARASITIC  WEALTH  I  25 

To  the  two  parasites  on  industry,  capital  and  land, 
we  have  added  a  third  parasite,  "Trade  Monopoly." 
Not  enough  that  we  are  held  up  by  those  Claude  Du- 
vals  of  Political  Econom}-,  Rent  and  Interest,  the  state 
must  now  step  in  with  paternal  solicitude,  and  hand 
us  over  to  the  Dick  Turpins  of  tariff  protection. 

And  does  protection  encourage  home  industry  ? 
Not  unless  pampered  indolence  is  a  spur  to  effort, 
and  helplessness  leads  to  self  support. 
■  We  have  by  tariff  legislation  artificially  nurtured 
and  rendered  chronically  helpless  and  dependent  the 
industries  of  the  nation.  We  have  withdrawn  them 
from  the  wholesome  and  invigorating  effects  of  open 
competition,  and  exposed  them  to  the  baneful  and  un- 
healthy influence  of  State  paternalism.  With  most 
unjust  discrimination  against  self-respecting  and  self- 
supporting  industries  of  our  land  and  at  their  expense, 
we  are  maintaining  a  perpetual  pension  fund  for  in- 
dustrial failures  and  incapables — a  sort  of  public  alms- 
house to  prop  up  business  incompetency. 

The  great  stimulus  to  excellence  is  this  very  com- 
petition from  which  we  are  shielding  our  "protected" 
industries.  Under  its  spur,  ingenuity,  skill  and  abil- 
ity are  brought  into  full  play,  which  backed  by  manly 
^^elf'feliance  is  the  foundation  of  enduring  success, 
put  we  have  done  worse.     Not  only  are  we  under- 


126  PARASITIC  "WEALTH 

mining  industrial  integrity  and  self-reliance,  but  the 
enervating  influences  of  a  pernicious  state  inter- 
ference is  invading  our  social  life.  Our  meddlesome 
paternalism  is  breeding  a  race  of  moral  weaklings, 
lacking  the  stamina  of  manhood  and  self-restraint.  As 
physical  and  mental  excellence  and  supremacy  are 
the  result  of  persistent  effort  to  overcome  obstacles 
and  difEculties,  so  character  and  moral  fibre  are  the 
result  of  a  constant  struggle  to  overcome  temptation. 
And  yet  forsooth,  we  must  discourage  self-restraint 
and  brinL{  up  a  race  coddled  into  an  artificial  state  of 
respectability  and  rectitude  b}'  restrictive  measures 
prompted  by  a  narrow  puritanical  religious  paternal- 
ism !  We  must  be  our  brother's  keeper  lest  he  go 
wrong ! 

We  are  presumably  a  nation  of  freemen  and  pride 
ourselves  on  our  free  institutions,  and  yet  our  person- 
al liberties  are  curtailed  to  a  degree  that  would  not 
be  tolerated  in  any  monarchy  in  Europe.  We  dare 
not  trust  ourselves  lest  freedom  for  good  become  a 
license  for  evil !  Let  us  be  men,  and  prove  ourselves 
worthy  of  the  blessings  of  liberty.  Let  us  forever 
and  without  revocation  annul  all  blue-laws  and  other 
laws  restrictive  of  personal  freedom  and  give  charac- 
ter a  chance.  Let  manhood  and  personal  responsi- 
bility assert  themselves,  and  v/e  shall    bring    up  men 


PARASITIC  WEALTH  127 

worthy  of  self  government,  a  race  of  freemen,  self- 
respecting,  self-supporting  and  self-reliant. 

Neither  morality  nor  prosperity  can  be  legislated 
into  a  nation,  but  they  may  be  seriously  hindered  b\- 
restrictive  laws.  Family  training  and  home  in- 
riuences  determine  the  one  and  individual  effort  the 
other. 

Let  us  not  delude  ourselves  further  in  regard  to 
state  paternalism,  for  it  spells  "  social  slavery."  Annul 
all  trade  limitations  and  abolish  all  restrictions.  Let 
us  have  social  and  industrial  freedom  in  the  widest 
sense.  Revoke  all  tariff  duties,  excises  and  other 
taxes,  for  they  are  not  only  restrictive  of  personal 
freedom,  but  they  are  violations  of  the  rights  of  pro- 
perty. There  is  but  one  justifiable  tax  and  that  is 
the  land  tax — the  "single  tax'"  advocated  by  Mr. 
Menry  George.  This  tax  equalizes  the  beneiits  of 
land  tenure  and  therein  lies  its  warrant  in  jus- 
tice. 

What  is  the  basis  of  material  prosperity  ? 

First,  as  explained,  we  must  set  right  our  pervert- 
ed economic  conditions.  This  will  emancipate  labor 
from  monopoly  dictation  and  make  it  non-competitive 
as  far  as  opportunities  of  emplo3'ment  are  concerned. 
If  under  such  favorable  conditions,  we  likewise  make 
our  labor  effective,  and  prevent  unnecessary  wastes  oi 


128  PARASITIC  WEALTH 

effort,  all  the  requirements  for    a   rapid    material  ad- 
vancement are  satisfied. 

At  the  head  of  all  wastes  of  human  effort  is  the  ap- 
palling waste  due  to  the  maintenance  of  large  standing 
armies  and  floating  navies.  Fortunately  in  this  coun- 
try the  expenditures  for  military  and  naval  establish- 
ments are  not  very  great,  though  there  is  a  dangerous 
tendency  to  increased  appropriations  for  that  purpose- 
Corrupt  political  influences,  however,  competing  for 
the  vote  of  the  veterans  of  the  late  war  by  promises 
of  liberal  party  legislation  has  swelled  the  pension 
roll  until  by  reckless  and  criminally  extravagant  ap- 
propriations the  burthens  of  ihe  people  have  been 
enormously  increased.  The  lofty  ideal  of  patriotic  duty 
has  been  degraded  and  debased  to  the  sordid  level 
of  party  spoils,  and  an  indiscriminate  grant  of  pensions 
has  resulted  in  a  disgraceful  scramble  for  State  patron- 
age, so  that,  to  be  enrolled  on  the  pension  list,  no 
longer  confers  honor  or  distinction  to  the  beneficiary, 
greatly  to  the  disparagement  of  the  truly  deserving 
heroes  of  the  war. 

What  we  now  pay  in  pensions  alone  will  rival  the 
outlays  of  some  of  the  great  European  powers  in  the 
maintenance  of  large  standing  armies. 

Justice  must  be  the  aim  of  Social  Reform  and  our 
pension  laws  should  be  revised.  The  pension  roll 
should  be  a  roll  of  honor  and  merit, 


PARASITIC  WEALTH  1 29 

Expenses  for  military  and  naval  purposes  must  be 
kt  pt  in  check. 

The  greatest  waste  of  the  country's  wealth,  not  ex- 
cepting even  the  waste  due  to  standing  armies,  is  the 
waste  due  to  enforced  idleness,  which  in  the  case  of 
our  present  hard  times,  we  tried  to  measure  statistical- 
ly. It  must  not  be  forgotten,  however,  that  much  en- 
forced idleness  prevails  in  the  most  prosperous  times 
due  to  the  monopoly  influences  we  have  traced.  This 
waste  under  normal  conditions,  probably  greatly  ex- 
ceeds the  amount  of  our  pension  rolls.  This  enormous 
loss  will  be  eliminated  when  we  emancipate  labor 
from  these  monopolies  by  our  Money  Reform. 

The  wastes  due  to  Government  extravagance 
through  party  corruption  will  cease  when  the  "spoils" 
system  is  eradicated  from  politics.  Social  justice  will 
improve  the  public  morals,  and  constitutional  limita- 
tions will  prevent  abuse  of  the  public  patronage. 

Much  effort  is  uselessly  wasted  in  the  production  of 
unnecessary  and  injurious  luxuries,  such  as  alcoholic 
drinks,  which  not  only  imply  a  waste  of  wealth, 
but  are  a  deteriorating  influence  on  productive 
efficiency.  However,  reform  here  must  be  left  to 
strengthening  of  character  and  moral  responsibility, 
which  will  come  from  greater  personal  freedom  and 
greater  well-being. 


130  PARASITIC  WEALTH 


The  wastes  of  efficiency  due  to  trade  restrictions  we 
have  already  noticed.  These  will  cease  when  such 
restrictions  are  removed.  The  wastes  of  effort  in  the 
useless  mining  of  gold  and  silver  for  money  use  will 
cease  with  the  issue  of  the  Reform  Mone}'. 

Our  system  of  industrl;d  production  and  distribution 
of  products  is  fortuitous  and  unscientific  ;  and  as  a  con- 
sequence very  wasteful.  The  losses  due  to  our  com- 
petitive business  methods  are  great ;  indeed  the  sums 
annually  spent  for  profitless  advertising  and  useless 
maintenance  of  an  army  of  middlemen  and  agents  to 
stimulate  trade  are  enormous.  The  waste  due  to 
misdirected  energy  and  misapplied  effort  in  conduct- 
ing production  and  exchange  is  appalling.  But  the 
process  is  improving.  The  system  of  industrial  pro- 
duction and  exchange  by  Trusts  and  Combinations  is 
simply  an  improved  method  with  the  wasteful  features 
of  competition  and  fortuitous  production  eliminated. 
The  Trust  is  a  scientific  method  of  industrial  produc- 
tion and  distribution,  and  shovild  be  encouraged. 
These  combinations  are  beneficial  where  free  trade 
and  free  competition  prevail,  but  tariff  restrictions 
make  of  them  dangerous  and  unscrupulous  monopolies. 
The  trust  is  the  germ  of  a  great  movement  toward 
productive  efficiency  and  must  revolutionize  our  pres- 
ent wasteful   methods.      The  output  and  distribution 


PARASITIC  WEALTH  I3I 

of  all  the  industries  of  the  world  must  sooner  or  later 
come  under  the  control  of  organized  intelligence,  and 
the  Trust  is  such  an  organized  effort.  It  should  be 
noticed,  that  the  trend  of  industrial  effort  is  constantly 
toward  greater  efhciency.  Every  invention,  every 
labor  saving  device,  every  short  cut  to  wealth  produc- 
tion, every  improvement  which  increases  the  efficiency 
of  human  labor  is  a  blessing.  It  makes  our  houses 
better,  our  clothes  better,  our  conveniences  greater, 
and  stimulates  to  greater  industry  and  effort.  We 
obtain  more  of  the  conveniences  of  life  for  less  effort 
than  before.  These  improved  methods  do  not  lessen 
employment — on  the  contrary  they  open  up  new 
opportunities.  If  our  efficiency  were  a  hundred  times 
greater  than  now,  the  opportunities  for  employment 
would  not  be  less,  but  more  numierous,  for  with  every 
new  opportunity,  new  possibilities  would  be  opened 
up.  Work  is  infinite,  and  if  the  avenues  to  it  are 
closed,  it  is  our  own  fault. 

There  is  another  source  of  waste,  which  with  eco- 
nomic justice  and  scientific  management  will  vastly 
decrease  and  in  time  entirely  disappear,  providing 
the  tendency  to  over-population  can  be  kept  in  check. 
I  refer  to  the  physically,  morally  and  mentally 
afflicted — the  crippled,  blind,  insane  and  otherwise 
physically  incapable  ;  the  drunkards  and  criminals  and 


132  PARASITIC  WEALTH 

Otherwise  morally  depraved  ;  the  indolent,  incompe- 
tent, paupers  and  beggars — all  of  them  wards  of  the 
State. 

The  pauper  and  criminal  are  to  a  great  extent  more 
sinned  against  than  sinning.  When  we  have  first  ex- 
tirpated the  great  economic  crime  at  the  root  of  our 
social  system — when  civilization  rhymes  with  equali- 
zation and  not  spoliation,  then  we  may  be  able  to 
deal  successfully  with  the  class  for  whose  wrong-do- 
ing our  social  injustice  is  largely  responsible.  With 
one  hand  society  robs  the  laborer  of  the  means  of  sub- 
sistence and  self  support,  and  with  the  other  punishes 
him  for  stealing  bread  to  save  his  family  from  starva- 
tion. And  this  is  justice!  A  social  system  based 
on  injustice  naturally  breeds  crime  and  moral  de- 
pravity. 

Our  economic  perversions  are  probably  largely  re- 
sponsible for  all  social  immorality  and  corruption,  for 
they  teach  that  wealth  may  be  had  without  compensa- 
tory effort.  They  have  converted  us  into  a  nation  of 
financial  speculators,  stock  gamblers  and  cunning 
schemers,  all  in  a  mad,  reckless,  frenzied  rush  for 
wealth — all  expecting  to  get  rich  without  honest 
work — rich  and  independent  at  some  one's  else  ex- 
pense. Honesty  is  a  relative  term.  The  ethics  of 
social  morality  is  largely  a  matter  of  method.     There 


PARASITIC  WEALTH  I33 

is  method  even  in  appropriation.  The  methods  of 
house-breaker  and  tliicf  are  crude  and  unscientific  be- 
side the  subtle  refinements  of  economic  absorption. 
The  robber  goes  to  jail  for  stealing  a  purse.  He  is 
disgraced  and  degraded.  He  suffers  privations  and 
indignities.  But  parasitic  wealth,  with  its  hand  in 
every  wage  earner's  pocket,  dwells  in  a  palace  in 
luxurious  ease  and  affluence,  while  an  army  of  indus- 
trial slaves  does  its  bidding  and  society  goes  down  on 
its  deferential  knees  to  its  kind.  It  is  fondled,  flattered, 
and  eulogized.     It  is  merely  a  difference  in  method. 

We  cannot  expect  pure  water  from  a  polluted  source, 
any  more  than  we  may  expect  virtue  from  vice. 

The  moral  diseases  of  mankind  are,  all  of  them,  in 
their  last  analysis,  traceable  to  abnormal  social  con- 
ditions present  and  past,  and  their  cure  must  of  ne- 
cessity imply  social  reform.  Chronic  destitution  leads 
to  despair.  Poverty  is  the  margin  where  human  en- 
durance ends  either  in  self-abasement  and  depen- 
dence, or  asserts  itself  in  self-destruction  or  crime. 
The  unjust  distribution  of  wealth,  the  affluence  of  the 
corrupt,  and  the  success  of  the  unscrupulous,  all  seem 
to  proclaim  the  absence  of  social  justice  and  fair  play, 
and  furnish  the  criminal  what  he  believes  to  be  a  justi- 
fication for  his  crime.  We  must  therefore  begin  w  ilh 
society  first  before  we  apply  our  morality  to  those 
whom  its  sin  helped  to  deprave. 


134  PARASITIC    WEALTH 

We  should  invoke  science  in  the  treatment  of  vice 
and  crime.  Chronic  cases  of  depravity  should  not  be 
permitted  to  breed  their  kind.  Vice  should  not  be  sup- 
pressed, but  extirpated  by  scientific  and  humane  meth- 
ods. All  criminals  should  be  made  self-supporting. 
Enforced  idleness  in  our  prisons  is  a  crime  against  the 
prisoners  and  against  society.  It  is  a  great  waste  of 
wealth  and  a  tribute  on  honest  labor.  The  position 
taken  by  trade  organizations  on  the  subject  of  prison 
labor  is  another  instance  of  fallacious  reasoning  due 
to  our  wretched  economic  perversions.  When  it  be- 
comes clear,  that  under  healthy  economic  conditions 
the  opportunities  for  work  will  always  overtake  the 
labor  seeking  them  and  that  employment  and  not  labor 
is  competitive,  the  short  sighted  policy  in  regard  to 
prison  labor  will  become  quite  apparent. 

Then  there  is  the  army  of  the  incompetents  and  in- 
capables,  from  which  pauperism  is  largely  recruited. 
These  are  the  stragglers,  weaklings  and  social  fail- 
ures, bringing  up  the  rear  of  the  industrial  proces- 
sion who,  in  the  race  of  life,  are  left  to  perish  by  the 
wayside.  The  requirements  of  race  superiority  in^.-. 
ply  under  the  cruel  operation  of  nature's  law  the  des- 
struction  of  the  weak.  To  foster  disease  and  inferi- 
ority by  protective  methods  is  to  encourage  race  de- 
terioration, therefore  all  congenital  cases  of  general 


PARASITIC  WEALTH  I35 

worthlessness  must  not  be  permitted  to  perpetuate 
their  kind.  By  the  wise  enforcement  of  humane 
methods  of  prevention,  chronic,  physical  and  moral 
worthlessness  will  gradually  disappear  and  cease  to 
be  a  burthen  on  the  rest  of  mankind. 

Another  source  of  waste  is  the  enforced  idleness 
due  to  labor  strikes  and  lockouts.  These  are  the 
protests  of  oppressed  labor  against  unjust  economic 
conditions,  which  make  it  competitive  and  place  it  at 
the  mercy  of  monopoly. 

The  avenues  of  employment  are  closed  bv  the  toll- 
gates  of  monopoly,  and  helpless  labor  stands  without, 
asking  permission  to  earn  a  living.  The  toll  is  tlie 
price  labor  pays  for  the  privilege  of  earning,  and  only 
those  who  can  pay  the  price  pass  through. 

Labor  hopelessly  competitive  has  no  redress  but 
that  which  may  come  from  organization  for  the  com- 
mon defense,  and  concerted  action.  The  strike  is  a 
protest  against  industrial  injustice. 

Under  normal  conditions  labor  will  be  free  and  non- 
competitive. Wages  and  services  will  be  reciprocal ; 
laborer  and  employer  will  meet  on  equal  terms,  both 
earning  their  income  by  productive  services,  neither 
having  any  advantages  over  the  other,  except  in  brains 
and  efficiency,  each  rewarded  according  to  his  indus- 
trial ability. 


136  PARASITIC  WEALTH 

Under  such  conditions  Trades  Unions  and  other 
Labor  Organizations  will  have  no  grievances,  and  no 
enemy,  and  will  resolve  themselves  into  societies  for 
social  and  intellectual  advancement. 

With  all  these  great  wastes  of  human  effort  elimi- 
nated, the  productive  efficiency  will  be  largely  en- 
hanced. The  increased  well-being  of  the  depleted 
millions,  will  tend  to  their  elevation  and  refinement, 
and  conduce  to  still  greater  efficiency. 

It  must  not  be  imagined  that  we  have  reached  the 
zenith  of  industrial  advancement.  We  are  still  only 
at  the  beginning  and  evolution  is  slow  and  painful. 
The  vicissitudes  of  industrial  progress  are  great  and 
throw  out  of  employment  temporarily,  specialized 
labor,  through  pressure  of  constant  changes  in  methods 
and  improvements.  It  should  be  a  fixed  State  policy 
to  lessen  waste  through  temporary  idleness  of  such  as 
are  stranded  in  industrial  centers  through  the  exigen- 
cies of  trade. 

The  land  tax  will  yield  revenue  far  beyond  purely 
State  uses  and  the  surplus  must  be  applied  to  public 
improvements.  Work  on  public  improvements  should 
always  be  on  tap  to  anyone  passing  the  requisite  test 
of  efficiency.  There  should  be  a  lowest  rate  of  pay 
for  a  certain  recognized  class  of  work  and  this  pay 
should  not  be  so  large  as  to  be  an  inducement  to  seek 


PARASITIC  WEALTH  1 37 

public  work  in  preference  to  private  enterprise,  but 
to  relieve  honest  and  efficient  effort  fairlv.  Promotions 
to  higher  grades  of  work  could  be  made  from  this  class. 
The  Public  Improvement  Bureau  would  then  always  be 
a  guarantee  of  employment  to  the  efficient  and  prove 
a  national  boon^  as  establishing  a  labor  overflow  out- 
let, and  a  lowest  level  of  comfort  below  which  com- 
petent labor  could  never  fall.  The  different  Bureau 
districts  should  be  competitive  with  one  another  as  lo 
comparative  showings  of  expenses  for  paving  and  ex- 
cavating, etc.,  to  insure  greater  efficiency  for  money 
expended. 

A  surplus  fund  for  Public  Improvements  should 
always  be  kept  on  hand  to  meet  industrial  and  other 
emergencies.  Droughts,  floods,  local  disasters  and 
other  derangements  temporarily  throw  workers  out  of 
employment  and  debar  them  from  earning  a  living. 
Public  improvement  work  is  an  asylum  for  such  as 
cannot  at  once  accommodate  themselves  to  new  con- 
ditions, welcoming  them  to  earn  an  honest  living  in- 
stead of  depending  on  charity.  Public  improvements 
add  to  the  nation's  wealth  and  benefit  the  commun- 
ity to  the  full  value  of  the  money  expended  ;  why  then 
allow  any  waste  of  human  effort  ?  Enforced  idleness 
is  a  public  loss  and  a  great  hardship  to  the  unem- 
ployed.    To  be  out  of  work  means   not  to  earn  :   not 


T38  PARASITIC  WEALTH 

to  earn  means  not  to  spend,  and  therefore,  not  to 
consume ;  lessened  consumption  means  lessened  pro- 
duction, and  this  means  hardship  to  other  producers, 
so  that  one  part  of  the  community  cannot  be  affected 
'.vithout  affecting  the  well-being  of  the  Vv'hole.  Here, 
th(  refore,  comes  in  the  legitimate  function  of  the 
State.  The  individual  can  look  after  his  own  affairs 
better  than  the  State,  but  the  State  can  look  after  the 
collective  welfare  better  than  the  individual.  Of 
coarse,  if  relief  measures  could  be  assured  by  private 
enterprise,  by  some  method  of  insurance,  it  might  be 
;:  preferable  method,  as  self-help  is  the  best  help,  but 
in  the  absence  of  such  some  public  provision  must  be 
made  for  lessening  the  evils  of  temiporary  idleness. 

The  money  volume  being  ample,  the  surplus  fund 
may  be  allowed  to  accumulate  without  prejudice  to 
commerce  and  industry. 

Reckless  extravagance  of  government  must  be 
checked.  One  of  the  reasons  of  corruption  and  job- 
bery is  that  no  efficient  system  of  competitive  checks 
on  public  expense  and  work  output  have  been  intro- 
duced. All  government  work  must  be  competitive 
as  to  expense  and  efficiency,  and  ''comparison  state- 
ments" should  be  instituted  as  a  test  gauge  of  public 
service.  The  comparison  blanks  should  be  designed 
pn   a  per  capita   or  some   other    convenient  basis  of 


PARASITIC  WEALTH  I  39 

comparison,  and  should  show  items  of  expense  of  the 
past  year  as  compared  with  expenses  of  some  prior 
year  of  greatest  economy.  The  heads  of  departments 
should  be  held  responsible  for  expenses,  and  subject 
to  removal  for  lack  cf  economy.  In  this  way  only 
can  we  expect  efficiency  in  public  service.  There 
are  several  industrial  branches  where  collective  effort 
would  be  more  efficient  and  beneticial  than  private 
enterprise,  if  political  corruption  could  be  eliminated. 
Public  management  of  the  post  office  has  been  a 
source  of  great  convenience  and  saving.  In  like 
manner,  but  to  a  vastly  greater  degree,  the  public 
management  of  money  and  banking  will  be  a  boon. 
In  a  minor  though  very  important  degree,  the  collective 
management  of  the  telegraph  and  public  highways 
would  be  a  blessing.  The  telegraph,  railroads  and 
canals  are  national  industrial  opportunities,  and  the 
benefits  of  same  should  be  equalized.  Franchises 
should  not  be  granted  to  private  individuals, 
and  highways  should  not  be  permitted  to  fall 
under  the  control  of  any  individual  or  corpora- 
tion. But  unless  we  divorce  the  public  business  from 
party  corruption  and  pillage,  we  are  probably  better 
off  to  entrust  as  little  business  to  Government  as  pos- 
sible- That  under  proper  checks  these  public  enter- 
prises can  be  successfully  carried  on  and  economically 


I.jO  PARASITIC  WEALTH 

managed,  there  is  absolutely  no  doubt,  but  such  effici- 
ency implies  constitutional  reforms,  limiting  political 
interferences  in  the  people's  business  and  establishing 
the  public  service  on  a  scientific  basis.  Then  and 
only  then  may  we  expect  honesty  in  office.  Most  of 
our  public  and  private  corruption  is  due  to  the  im- 
morality underlying  our  civilization.  When  social 
justice  has  been  inaugurated  we  may  expect  a  very 
material  change  in  public  morals. 

Public  outlays  must  be  jealously  watched  and  ad- 
ministrations must  be  judged  by  standards  of  public 
economy. 

Extravagance  leads  to  corruption  and  to  national 
decadence.  However,  all  immoral  tendencies  will  be 
more  or  less  checked  when  the  efficient  and  strong 
are  taxed  exactly  in  proportion  to  their  land  holdings, 
and  are  obliged  to  pay  these  taxes  out  of  the  proceeds 
of  honest  effort  and  not  out  of  the  sweat  of  other 
men's  labor.  The  same  men,  who  with  criminal 
recklessness,  voted  away  extravagant  appropriations 
of  the  people's  money  under  the  spoils  system, 
will  now  begin  to  consider  their  own  pockets  into 
which  the  tribute  of  despoiled  labor  will  have  ceased 
to  flow. 

If  our  present  imperfect  civil  service  system  is  in- 
fidequate  to  give  us  an  honest  administration  of  public 


PARASITIC  WEALTH  I4I 

affairs,  we  must  so  alter  it  that  partisan  interference 
can  affect  civil  service  only  on  lines  of  greater  effi- 
ciency and  economy. 

No  social  reform  can  be  complete  which  does  not 
provide  for  the  nationalization  of  public  monopolies. 
While  we  fully  realise  the  corruptions  and  short  com- 
ings of  public  service,  we  are  forced  to  admit  one  of 
two  things  or  both  of  them  ;  either  the  corruptions  of 
public  office  and  inefficiency  of  public  service  are  due 
to  some  inherent  wrong  in  our  system  which  may  be 
removed,  or  we  are  incapable  of  self-government. 
There  seems  to  be  no  doubt  as  to  the  true  cause  of 
misgovernment.  With  the  advent  of  social  justice, 
new  social  conditions,  and  political  regeneration  must 
logicall}'  follow.  Under  such  conditions  the  corrupt 
dispensation  of  public  patronage,  the  granting  of  trade 
monopolies,  the  lobbying  of  franchises  and  privileges, 
and  the  general  legislative  catering  to  private  greed 
and  selfishness,  cannot  continue  very  long.  Political 
corruption  and  depravity  must  in  a  large  measure 
cease  when  class  legislation  and  paternalism  are  pro- 
hibited, and  when  partisan  interference  in  public 
business  is  checked. 

Under  improved  social  conditions,  and  proper  civil 
(service  regulations,  we  may  expect  efficient  service 
^nd  economy  in  public  affairs. 


142  PARASITIC    WEALTH 

The  highways  belong  to  the  people  and  it  seems 
like  a  great  privilege  that  any  one  person  or  corpora- 
tion should  monopolize  a  public  convenience.  Rail- 
roads, roadways,  waterways  and  telegraphs  must 
ultimately  come  under  the  management  of  the  people, 
and  though  immediate  change  from  private  control 
may  be  undesirable,  such  nationalization  should  be 
kept  constantly  in  view.  The  ''land  purchase  act" 
should  cover  the  purchase  of  all  the  improvements 
and  equipments  of  such  of  the  public  monopolies  as 
it  may  be  deemed  expedient  to  nationalize. 

In  the  managements  of  the  railroads,  telegraphs 
and  the  post  office,  and  in  the  control  of  land  and 
money,  the  State  function  is  not  only  legitim.ate  and 
proper,  but  urgent.  These  are  public  interests  and 
not  private  concerns. 

But  the  commerce  and  industries  are  essentially 
private  affairs  and  should  be  left  to  regulate  them- 
selves. We  should  not  only  resent  any  approach  to 
State  interference  with  trade,  but  even  insist  upon 
the  annulment  of  the  constitutional  clause  which  en- 
powers  congress  "to  regulate  commerce  with  foreign 
nations  and  among  the  several  States,"'  seeing  what 
injury  has  been  done  by  the  injudicious  exercise  of 
this  power.  Under  no  pretext  whatever  should  con- 
gress be  permitted     to  place    restrictions    on  trade. 


PARASITIC    WEALTH 


43 


Both  in  the  regulation  and  management  of  the  com- 
merce and  the  industries  we  are  justified  in  warning 
the  State,  "Hands  off." 


CHAPTER  VIII. 

In  a  Society  based  on  injustice  the  "survival  of  the 
littest"  means  the  survival  of  the  unscrupulous. 

There  can  be  no  honor  in  wealth  acquired  under 
unjust  conditions.  Do  we  not  all  of  us  feel  that  some- 
how the  millionaires  could  not  possibly  have  earned 
a  tithe  of  their  vast  fortunes  ? 

Let  us  for  a  moment  contemplate  Mr.  Thos.  G. 
Shearman's  classification  of  some  of  the  millionaires  of 
eight  years  ago  which  he  used  in  his  estimates  of 
wealth  distribution.  The  figures  are  taken  from  the 
New  York  World  of  June  20th,  1897.  While  the  es- 
timates may  now  be  wide  of  the  mark  in  some  cases, 
in  a  general  wa}'  they  will  answer  our  purpose. 


J.  J.  Astor.        - 

ISO 

millions, 

C.  Vanderbilt.     - 

-       lOO 

W.  K.  Vanderbih,    - 

100 

Jay  Gould. 

100 

Leland  Stanford. 

100 

;.  D.  Rockefeller. 

-     100 

Estate  of  A.  Packer, 

70 

John  I.  Blair, 

-     60 

Estate  of  Chas.  Croker,     - 

60 

William  Astor,     - 

-       so 

W.  W.  Astor, 

50 

m 

PARASITIC  WEALTH  1 45 

Russell  Sage,       -         -         -       50       " 
E.  A.  Stevens,  -         -  50       " 

Etc..  etc.,  etc. 

Referring  back  to  our  definition  of  money  we 
found  it  to  be  simply  a  receipt  for  services  rendered — 
a  voucher  for  work  done  usefully  and  productively — 
which  empowered  the  holder  to  levy  on  Societv  for 
an  equivalent  either  in  present  services,  or  in  past  ser- 
vices as  represented  in  commodities. 

If  we  come  honestly  by  this  money  it  must  repre- 
sent something  we  have  done  productively  for  the 
comfort  or  advancement  of  our  fellow  men  upon  whom 
we  levy  for  an  equivalent.  In  other  words,  the  monev 
must  come  to  us  as  a  reward  for  useful  effort. 

How  much  of  this  wealth  represents  actual  services 
-  rendered  mankind  by  the  possessors  of  it  ?  Are  these 
men  intellectual  or  industrial  giants,  possessing  pro- 
digious powers  of  production  and  conferring  on  so- 
ciety vast  benefits?  If  not,  how  did  they  come  by 
this  money?  If  these  millions  do  not  represent  the 
productive  effort  of  the  millionaires  possessing  them 
whose  productive  effort  can  they  represent?  Plainly 
speaking,  how  much  of  this  wealth  is  of  parasitic 
growth  and  how  maich  honest  flesh  and  blood,  and 
where  in  justice  should  the  knife  of  confiscation  be 
applied?  Let  us  see.  What  is  a  million  dollars? 
The  average  yearl}-   reward   of   human   effort    in   the 


146  PARASITIC    WEALTH 

United  States  is  about  six  hundred  dollars  per  year 
per  worker.  If  by  excellent  management  and  great 
self-denial  half  of  the  sum  be  saved  yearly,  it  would 
take  three  thousand  three  hundred  and  thirty-three 
years  of  continuous  work  and  abstinence  to  save  one 
million  of  dollars.  That  is,  if  a  man  of  average  abil- 
ity commenced  saving  up  half  of  his  earnings  about 
the  time  of  the  exodus  of  the  Israelites,  he  would  by 
this  time  have  accumulated  about  one  million  dollars; 
and  yet  some  of  these  people  are  able  to  draw  an  in- 
come of  from  six  to  nine  millions  a  year! 

If,  after  the  ground  had  been  cursed  for  his  sake, 
and  he  was  condemned  to  eat  bread  in  the  sweat  of  his 
face,  Adam  had  thought  best  to  invest  in  a  Life  In- 
surance policy  maturing  A.  D.  1897,  and  had  saved 
half  the  earnings  of  a  man  of  average  ability,  his 
total  deposits  up  to  date  would  amount  to  only  about 
1,800,000  dollars.  And  yet  we  have  men  reputed 
to  be  possessed  of  something  like  one  hundred  times 
that  amount  of  wealth!  Surely  the  earth  brinffs  forth 
no  thorns  and  thistles  for  these  men,  nor  do  they  eat 
their  bread  in  the  sweat  of  their  brow.  How  did 
they  get  it.^  Will  Mr.  Astor  claim  that  he  or  his  an- 
cestors have  actually  rendered  to  society  in  services 
an  equivalent  of  his  enormous  possessions?  Will  he 
claim,  honor  bright,  that  his  useful  efforts  to  human 


PARASITIC  WEALTH  I47 

kind  equalled  the  productive  work  of  say  live  men  of 
average  ability?  Will' the  natural  modesty  of  Mr. 
Vanderbilt  permit  him  to  claim  that  he  has  conferred 
on  his  fellowmen  services  worth  the  efforts  of  say  ten 
men  of  average  ability  ?  Perhaps  the  author  is  not 
very  appreciative,  but  he  really  doubts  if  some  of  our 
millionaires  could  earn  an  honest  living  if  left  to  their 
own  resources.  And  as  to  those  capable  of  self  sup- 
port, has  not  the  leisure  of  Labor's  competence  been 
sacrificed  to  give'  them  training  and  education  ? 
Whence  came  these  millions  and  whose  money  are 
they?  They  surely  represent  the  sweat  of  good 
honest  toil  and  effort.  Whose  toil  is  it?  The 
people's.  These  millions  are  almost  wholly  the  tri- 
bute exacted  from  human  effort  for  thc^  use  of  the 
artificial  monopoly,  money,  and  the  natural  miOnopoly, 
land.  Interest  on  "Capital'^  and  rent  on  land  and 
speculation  in  these  monopolies  have  been  chiefly  the 
sources  of  these  fortunes.  They  represent  the  drain 
on  human  industry  by  the  idle  and  unjust  possession 
of  the  people's  natural  productive  opportunities. 

It  is  not  here  contended  that  there  are  not  men 
capable  of  earning  great  wealth.  On  the  contrary, 
there  are  thousands  of  intellectual  and  industrial  giants 
and  leaders  of  industrial  effort  who  have  conferred 
great  benefits  on  society.      It  is  difHcult  to  see,  for  in- 


148  PARASITIC  WEALTH 

Stance,  how  millions  could  pay  an  Edison  for  the 
benefits  he  has  conferred  on  mankind.  There  is  no 
doubt  whatever  that  many  of  our  very  wealthy  men 
have  by  real  ability  and  efficiency  conferred  on  society 
certain  substantial  benefits,  but  as  a  rule  the  rewards 
are  out  of  all  proportion  to  the  services.  An  honest 
social  condition  based  on  fair  play,  will  give  all  men 
their  deserved  reward,  and  wealth  under  such  a  con- 
dition will  be  a  true  criterion  of  -'worth"  and  a  cer- 
tificate of  honor.  It  is  quite  probable  that  many  of 
the  competent  rich,  who  have  conferred  benefits  on 
society,  would  be  glad  if  the  parasitic  features  of 
wealth  did  not  exist,  as  there  can  be  no  honor  in 
wealth  acquired  without  compensatory  effort. 

We  have  spoken  of  equity  in  the  liquidation  of  the 
claims  of  present  land  holders.  In  the  face  of  the 
great  injustice  to  the  expatriated  and  dispossessed, 
would  it  really  be  justice  to  those  whom  present  social 
condhions  have  so  grievously  wronged,  that  on  top  of 
other  private  fortunes  of  these  unjustly  rich,  the  State 
should  cash  their  holdings  in  full  H  It  would  seem  to 
be  a  great  perversion  of  justice  to  do  it.  The  State 
ought  to  set  a  price  limit  to  land  tenure,  beyond 
which,  compensation  should  not,  in  justice  to  the 
common  interest, be  permitted.  The  land  in  excess 
of  such  holdings  should  revert  to  the  national  domain. 


PARASITIC  WEALTH  I49 

Abstract  justice  can  not  of  course  be  done ;  the 
iniquities  of  our  social  conditions  have  caused  irrepar- 
able suffering  to  the  despoiled.  Out  of  the  priva- 
tions and  sufferings  of  the  wronged,  the  unjustly  ricii 
have  for  centuries  enjoyed  especial  comforts  and  ad- 
vantages, and  neither  the  sufferings  of  the  despoiled, 
nor  the  pleasures  and  privileges  of  the  benefited  can 
be  revoked.  The  past  lies  beyond  the  reach  of  jus- 
tice. The  present  may  however  be  remedied,  though 
at  best  the  reorganization  on  lines  of  justice  must 
largely  partake  of  relative  ethics.  The  aim  should 
be,  the  greatest  justice  to  the  greatest  number,  seek- 
ing the  even  justice  of  all. 

But  while  the  injustice  of  full  liquidation  of  the 
claims  of  the  immensely  rich  is  quite  apparent,  can 
we  consistently  and  within  the  scope  of  constitutional 
rights  establish  an  arbitrary  limit  of  land  compensa- 
tion, and  will  not  such  distinction  in  land  claims  work 
hardship  as  between  those  rich  in  land,  and  those  rich 
in  other  properties?  At  best,  ethically  speaking, 
social  re-organization  is  full  of  difficulties.  Our  aim 
should  be  first,  to  establish  just  economic  conditions 
and  relieve  the  socially  wronged  from  further  spoli- 
ation ;  if  then  some  of  the  wealth  acquired  under  un- 
just social  conditions  can  be  recovered  to  the  people, 
it  certainly  seems  right  that  an  effort  should  be  made 
to  do  so. 


150  PARASITIC  WEALTH 

The  people  are  greater  than  constitutions,  and 
whether  Hquidation  to  the  full  value  or  within  pre- 
scribed limits  be  agreed  upon,  will  wholly  depend 
upon  the  interpretation  of  the  word  "Justice." 

There  is  no  doubt,  however,  that  pending  reor- 
ganization and  readjustment  on  reform  lines,  which 
must  be  a  very  slov,'  process,  self-interest  will  in  the 
meanwhile  so  operate,  as  to  defeat  any  government 
scheme  seeking  to  appropriate  any  part  of  the  vast 
estates  of  the  unjustly  rich  to  public  use.  We  will 
thereby  be  spared  any  ethical  qualms  of  conscience  on 
the  score  of  possible  injustice  being  done  to  the  para- 
sitic minority. 

Were  it,  however,  practicable  to  restore  to  the  people 
some  of  this  unjustly  acquired  wealth,  and  the  limit 
of  land  ownership  subject  to  compensation  were  fixed 
at,  say,  the  average  wealth  of  the  nation  per  family, 
which  is  about  five  thousand  dollars,  it  is  fair  to  esti- 
mate that  more  than  ninty-eight  per  cent. of  the  popu- 
lation would  have  their  land  claims  liquidated  in  full 
and  that  less  than  two  per  cent,  would  be  affected  by 
such  compensation  limit.  The  immensely  and  unjustly 
rich  would  still  possess  an  enormous  advantage  over 
the  masses  by  virtue  of  their  vast  industrial  and  com- 
mercial investments,  but  no  one  would  begrudge  them 
these  advantages,  if  further  drain  on  the  people's  re- 
sources might  be  stopped. 


PARASITIC    WEALTH  l^t 

It  is  fair  to  estimate  the  value  of  the  land  reverting 
to  the  national  domain  by  virtue  of  such  a  compensa- 
tion limit,  as  exceeding  ten  billions  of  dollars.  Reform 
money  to  the  full  value  of  this  land  might  be  issued 
and  held  in  the  public  treasury  as  a  reserve  fund. 
From  this  reserve  fund  our  nine  different  kinds  of 
money  and  obligations  could  be  redeemed.  There  is 
no  doubt  that  the  demonetization  of  gold  by  the 
United  States  will  at  once  depreciate  its  value  and  the 
nation  will  lose  the  difference  between  its  money 
value  and  its  metal  value.  What  the  loss  will  be  on 
silver  bullion  we  are  in  a  fair  position  to  estimate:  the 
depreciation  on  gold  will  be  fully  as  much.  Our  loss  on 
coin  and  bullion  will  probably  reach  the  neighborhood 
of  800  millions  of  dollars  or  more.  This  together 
with  our  irredeemable  paper  will  deplete  the  new 
treasury  of  something  like  1150  millions  of  Reform 
Dollars,  but  it  will  be  cheap  riddance  of  bad  rubbish 
to  forever  retire  our  absurd  coin  and  paper  money. 

To  briefly  recapitulate  : — We  inferred  deductively 
that  an  ideal  system  of  societ}'  w'ould  be  such,  that 
while  conceding  to  the  individual  the  greatest  possible 
personal  freedom  consistent  with  the  highest  welfare 
of  society  as  a  whole,  it  w  ould  guarantee  to  ever}- 
member  of  the  community  an  equal  chance  in  the  race 
of  life  without  prejudice — an  equal  opportunity  with- 


152  PARASITIC  WEALTH 

out  favor  or  hindrance.  That  if  we  enter  the  arena 
of  life  on  equal  terms  as  regards  the  industrial  oppor- 
tunities, then  all  the  requirements  of  social  ethics  will 
be  satisfied. 

Does  our  present  system  fulfill  the  requirements  of 
such  an  ideal  ?  Are  the  conditions  such  as  to  guar- 
antee fair  play  to  every  one  in  the  struggle  for  sub- 
sistence ?  Our  investigations  can  leave  no  room  for 
doubt  or  hesitation,  and  we  declare  most  conclusively 
and  emphatically.  No.  The  conditions  are  unfair 
and  unjust.  At  the  base  of  society  we  find  a  grievous 
wrong — at  the  core  of  civilization  a  social  crime. 
Two  great  industrial  opportunities  of  productive  ef- 
fort, the  benefits  of  which  should  be  common,  have 
been  left  to  the  sport  of  private  speculation  and  mon- 
opoly. The  shrewd  and  cunning  obtain  control  of 
these  opportunities,  monopolize  the  avenues  of  em- 
ployment and  thus  hold  the  key  to  the  industrial  sit- 
uation. The  restrictions  which  tribute  puts  upon 
industry,  render  labor  hopelessly  competitive  and  place 
industrial  effort  completely  at  the  mere}'  of  idle  pos- 
session. Labor  is  degraded  and  enslaved;  pauperism, 
crimo  and  immorality  are  encouraged.  A  small 
minority  absorb  the  nation's  productive  output  and 
live  in  luxurious  ease  and  idleness  at  the  expense  of 
depleted  millions.      This  in  short  is  the  present  social 


PARASITIC    WEALTH  I  53 

condition.     The  evils  have  been  known  for  centuries, 
but  the  causes  were  not  traced  to  the  perversions  of 
Political  Economy.     All  social  reformers  have  keenly 
felt  the   injustice  of   these   conditions  and  have  sug- 
gested measures  of  relief,  but  these  schemes  of  reform, 
if  not  simply  ameliorative  and  superficial  expedients, 
were  subversive  of  a  natural  order  of  social  evolution. 
Nearly  all  of  them  imply   legislative  acts  and  forms 
restrictive    of  personal  freedom,    and   obstructive   of 
natural  and  healthy  progress  and  development.      No 
social  reform  can  ever  become  practical  or  successful 
which  does  not  rest  on  natural  laws,  and  which  has  to 
be  propped  up  by  artificial  legal  contrivances  to  make 
it  operative.      Such    a  system   implies    coercion   and 
can    mean    but    one    thing — social    despotism.       No 
social  reform  can  be  lasting  which  does  not  guarantee 
to  every  individual  that  greatest  of  all  boons — freedom. 
We  must  be  free ;  socially  free,  industrially  free,  poli- 
tically free— free  to  move  and  have   our  being  with- 
out "paternal''  restraints. 

The  money  reform  here  outlined  contemplates  no 
abridgment  of  personal  freedom.  It  implies  no 
social  restrictions,  beyond  those  absolutely  necessary 
to  maintain  national  coherence  and  integrity  and  those 
social  safeguards  which  prevent  men  from  injuring 
one  another  not  only  sociallv  and  physically,  but  also 


154  PARASITIC  WEALTH 

industrially.  It  guarantees  even  justice  to  every  man 
and  rewards  exertion  in  the  exact  ratio  of  useful  effort. 
The  individual  who  renders  human  kind  the  highest 
service  obtains  the  highest  rewards,  but  these  rewards 
do  not  empower  him  to  enslave  his  less  favored  brother, 
or  levy  tribute  on  the  sweat  and  toil  of  other  men.  His 
superior  abilities  do  not  permit  him  to  take  undue  ad- 
vantage of  his  fellowman. 

Emancipate  Land  and  render  Capital  premiumless, 
and  social  reform  is  an  accomplished  fact,  without  the 
sacrifice  of  the  only  thing  worth  living  for  in  this 
world— personal  freedom.  The  much  abused  senti- 
ment "  Liberty,  Equality  and  Fraternity"  will  then 
for  the  first  time  be  more  than  an  empty  phrase,  and 
the  grand  word  "'Democracy,"  as  an  embodiment  of 
equality,  will  acquire  a  meaning  it  never  had  before. 
Plutocracy  and  aristocracy,  the  offspring  of  parasitic 
wealth,  will  be  things  of  the  past. 

How  much  will  the  "Money  Reform"  system  save 
to  the  nation  ? 

On  the  basis  of  Mr.  Shearman's  estimates,  more 
than  76  per  cent,  of  the  nation's  wealth  is  in  the 
hands  of  less  than  three  per  cent,  of  the  people.  As 
the  forces  of  wealth  concentration  have  not  ceased 
operating  since  Mr.  Shearman  published  his  figures 
over  eight  years  ago.  it   is  presumable  that   the  dis- 


PARASITIC    WEALTH  I55 

parities  have    not,  since   that  time,   grown  less,   but 
rather  more  intensified. 

It  is  quite  fair  to  estimate  that  about  70  of  the  76 
per  cent,  of  the  vveahh  in  the  hands  of  the  parasitic 
"three  per  cent."  is  interest  bearing,  and  that 
probably  10  of  the  remaining  24  percent,  is  involved 
in  one  way  or  another  in  indebtedness  and  also  yields 
rent  or  interest.  Thus  four  fifths  of  the  capital  of  the 
United  States  would  be  yielding  "income."  To  be 
quite  within  reason  we  will  assume  that  only  three- 
quarters  of  the  nation's  capital  yields  such  revenue. 
If,  on  the  basis  of  the  Eleventh  Census  $62,600,- 
000,000  out  of  the  $65,000,000,000  bs  the  value 
of  private  wealth  in  1890,  then  the  capital  on 
which  interest  was  paid  will  foot  up  about  $46,- 
950,000,000. 

All  conveniences  conducive  to  shelter  and  comfort ; 
all  improvements  and  facilities  aiding  industrial  effort ; 
all  methods,  appliances  and  machinery  may  be  classed 
as  the  tools  of  production.  They  are  man's  equip- 
ment, and  land  is  his  workshop.  More  than  three- 
quarters  of  the  workshop  and  the  tools  of  industrial 
production  are  in  the  hands  of  the  parasitic  "three." 
Perverted  economic  conditions  have  made  it  possible 
for  an  insignificant  minority  to  obtain  control  of  this 
vast  wealth  and  to  use  it  with  despotic  power  for  the 


156  PARASITIC  WEALTH 

indefinite  and  continued  exploitation  and  enslave- 
ment of  the  helpless  wealth  producers.  It  is  a  system 
of  economic  plunder  for  which  the  term  "social  in- 
famy" is  a  mild  expression. 

The  prevailing  bank  rate  on  "gilt  edge"  security 
is  six  per  cent.  All  capital  therefore  assumes  as  its 
right  a  toll  of  six  per  cent,  in  addition  to  the  costs  of 
its  maintenance  and  superintendence.  The  whole  of  this 
46950  millions  of  dollars  worth  of  property,  in  addi- 
tion to  the  price  of  its  maintenance,  therefore  claims 
a  toll  of  six  per  cent,  for  hire.  We  have  assumed 
that  if  the  collective  people  undertook  banking,  the 
actual  cost  of  banking  services  would  probally  fall 
below  the  half  of  one  per  cent.  Let  us  assume  this 
excessive  rate  of  the  half  of  one  per  cent,  as  covering 
the  cost  of  banking.  Then  such  percentage  will  con- 
stitute a  legitimate  charge  for  services,  and  all  capital 
will  claim  a  right  to  collect  for  such  services  in  addi- 
tion to  charges  for  cost  of  maintenance  and  services 
connected  with  its  renting.  While  now  we  are  paying 
six  per  cent,  interest  for  capital's  hire,  we  would 
under  the  new  conditions  pay  only  this  "bank  vSer- 
vice"  charge  of  the  half  of  one  per  cent.  The  five  and  a 
half  per  cent,  additional  we  are  now  pa\'ing  thu:; 
appears  to  be  a  tribute  to  idle  possession,  and  in  ex- 
j:ess  of  any  productive  service.  Five  and  a  half  per  cent 


PARASITIC  WEALTH  I57 

on  46,950  millions  of  dollars  per  year  is  2,582  millions 
of  dollars,  which  amount  goes  to  build  up  an  aristo- 
cracy of  wealth,  and  for  which  society  receives  no 
equivalent.  Let  us  see  what  this  sum  of  money  means. 
Remember  that  these  estimates  apply  to  the  year  1890, 
and  that  since  then  the  nation's  wealth  has  very  largely 
increased,  and  the  conditions  for  the  depleted  major- 
ity are  probably  more  unfavorable. 

On  the  basis  of  the  population  for  1890  and  our 
estimate,  every  family  in  the  land  is  paying  these 
social  parasites,  on  an  average,  over  two  hundred 
dollars  per  year!  On  the  basis  of  Mr.  Waldron's 
estimate  of  yearly  productive  efficiency  this  tribute  to 
parasitic  wealth  corresponds  to  nearly  twenty  per 
cent,  of  the  average  yearly  income !  In  other  words, 
our  economic  perversions  have  taken  twenty  per  cent, 
from  the  gross  earnings  of  labor  and  put  the  money 
into  the  pockets  of  an  idle  aristocracy !  These  are 
amazing  figures  and  it  behooves  us  to  thoroughly  un- 
derstand how  they  are  obtained.  Let  us  measure 
this  economic  drain  on  human  effort  by  a  more  direct 
method. 

The  country's  total  wealth  value  at  this  moment 
will  probably  not  fall  short  of  80  billions  of  dollars, 
while  the  annual  industrial  output  may  be  safely  esti- 
mated at  about  16  billions  of  dollars.    Thus  for  every 


1^8  PARASITIC  WEALTH 


5  dollars'worth  of  wealth,  there  is  a  dollar's  worth  of 
productive  output  per  year.  About  three-quarters  of 
this  5  dollars'worth  of  wealth  may  be  considered  as 
interest  bearing  capital,  so  that  it  takes  $3-75  in  cap- 
ital to  yield  productively  i  dollar's  worth  of  new 
wealth  per  year.  For  the  repairs  and  maintenance 
of  this  capital  it  will  cost  on  an  average  about  4  per 
cent.,  and  for  bank  service  charge  about  ^2  P^^  cent, 
making  a  legitimate  charge  of  4  1-2  per  cent, 
on  $3.75,  or  nearly  17  cents.  This  amount  must  be 
deducted  from  the  gross  productive  output  of  i  dollar 
to  obtain  labor's  just  earnings.  But  over  and  above 
this  legitimate  charge,  there  remains  a  tribute  of  5^^ 
per  cent  premium  for  which  there  is  no  service  equiv- 
alent to  society.  This  premium  amounts  to  about 
twenty  cents  on  the  gross  productive  output  of 
one  dollar.  Deducting  the  17  cents  for  maintenance 
and  for  services,  we  obtain  83  cents  as  the  legitimate 
income  of  labor.  Upon  every  83  cents  which  labor 
earns,  this  premium  charge  of  20  cents  falls  as  a 
tribute,  or  in  other  words,  on  every  dollar  of  labor's 
just  earnings,  capital  levies  a  toll  of  24  percent! 

In  these  estimates  no  account  is  taken  of  the 
volume  of  paper  money  in  circulation,  nor  the  value  of 
products  in  process  of  consumption  on  which  interest 
is  being  paid,  which  would  tend  to  swell  the 
economic  drain  on  labor's  income. 


PARASITIC  WEALTH 


159 


But  this  is  not  all.  Something  like  twenty-eight 
per  cent  of  the  millionaires  owe  their  wealth  to  pro- 
tected industries.  The  tariff  tax  on  necessities,  by 
shifting  the  burthen  of  taxation  on  the  ninety-five  per 
cent  socially  wronged,  relieves  parasitic  wealth  from 
just  assessment,  thus  again  favoring  its  growth.  The 
enhanced  cost  of  living  to  the  despoiled  ninety-five 
per  cent.. from  which  tariff  monopoly  wrings  its 
millions,  further  reduces  their  earnings.  We  may 
safely  say  that  through  enhanced  cost  of  living  alone 
the  infamous  tariff  tax  probably  takes  ten  per  cent, 
more  out  of  the  pockets  of  the  unfortunate  worker. 
Thus  the  worker's  tribute  to  the  monopoly  of  opportun- 
ities is  about  thirty  three  per  cent,  of  his  actual  earnings, 
an  average  of  about  three  hundred  dollars  per  family 
for  the  creation  and  maintenance  of  an  idle  proprietary 
class !  Thus  a  sum  much  larger  than  the  cost  of 
the  civil  war,  is  diverted  annually  from  the  pockets 
of  the  people  and  goes  to  swell  the  redundance  of 
the  "parasitic"  rich. 

For  about  five  years  during  and  after  the  civil  war. 
a  period  of  unexampled  prosperity  prevailed  owing 
to  the  release  yearly  into  industrial  channels  of  some 
five  or  six  hundred  millions  of  dollars.  When  through 
jobbery  and  economic  plunder  these  millions  found 
their  way  back  again  to  the  coffers  of  the  rich,  and  the 


l6o  PARASITIC    WEALTH 

people  assumed  the  liquidation  of  the  debt  at  rates 
which  more  than  doubled  the  principal,  industrial 
activity  ceased  and  prosperity  came  to  an  end. 

If  setting  free  such  an  amount  of  money    per   year 
under  a  system  of  economic  spoliation  caused  so  much 
prosperity,  what  may  we  not  expect  under  a    system 
of  social  justice,  when  something  like  four  times  that 
amount  of  money  per  capita  remains    annually  in  the 
hands  of  the  people  for  circulation  in  trade  channels? 
It  mightappear  to  the  reader  that  the  words  "  Industrial 
Enslavement"    and    "Industrial    Independence"     are 
mere  figures    of  speech.      Far  from  it.      On  the  basis 
of  the  census  of  1890  there  were  12,690,151  families 
in  the  land.    If  our  estimates  of  labor's  tribute  to  idle 
possession  are  correct,  then   more  than    four  million 
families  were  exclusively  devoted  to  the  maintenance 
in  idle  luxury   of  less  than    four    hundred    thousand 
parasitic  families!     Is  this  not  industrial  slavery?     It 
is  worse  in  a  way   than  actual  slave  ownership,  for 
here,  starvation  is  the   whip   of  compulsion,    and  the 
slave  owners  are  spared  the  bother  and  inconvenience 
of  taking  care  of  their  human  chattels.     Our  Political 
Economy  does  that,  and  assumes   the  moral  responsi- 
bility  too.     Is  there  any  wonder  that  we  are  rushing 
headlong  to  national  self-destruction?     The  greater 
the  wealth  output,  the  heavier  the  tribute  and  more 


PARASITIC  WEALTH  l6l 

hopeless  the  bondage.  The  economic  blackmail  not 
only  depletes  the  workers  but  prevents  them  from  earn- 
ing, by  putting  a  toll  on  opportunity.  Better  abandon 
civilization  and  go  back  to  primitive  methods  than 
submit  to  this  social  loot.  Better  any  form  of  social- 
istic despotism,  than  such  iniquity.  Better  the  dead 
level  of  a  joyless  and  depressing  communism  than  a 
civilization  based  on  injustice. 

Establish  Money  Reform  and  Industrial  bondage  is 
at  an  end.  The  idle  rich  will  cease  to  thrive  and  the 
money  power  will  be  broken.  The  chronically  idle 
will  be  profitably  employed ;  the  vagrant,  tramp  and 
criminal,  will  now  join  the  industrial  army  in  an 
honest  effort  to  earn  a  living,  and  become  self-sup- 
porting. With  fully  employed  labor,  with  increased 
productive  efficiency,  .and  with  the  establishment  of 
social  justice,  what  degree  of  advancement  may  we 
not  expect? 

That  these  economic  wrongs  should  have  been  borne 
in  silence  these  many  years,  might  show  how  long 
human  nature  may  be  imposed  upon  before  being- 
provoked  to  overt  acts  of  social  revolt.  But  forbear- 
ance is  not  one  of  the  virtues  of  the  slumbering  giant, 
and  it  is  to  be  hoped  that  social  reform  will  overtake 
his  awakening  to  the  true  realization  of  his  wrongs,  or 
the  earth  may  tremble  with  his  wrath  and  fury. 


1 62  PARASITIC    WEALTH 

The  provocation  has  been  great  and  the  injustice 
monstrous,  and  were  it  not  that  familiarity  with  mis- 
ery breeds  indifference  to  it,  and  that  we  grow  callous 
to  suffering,  the  social  iniquities  would  seem  to  be 
past  endurance 

But  nature  is  not  without  a  parallel  strongly  sug- 
gestive of  our  social  perversions  of  justice,  and  the 
comparison  is  not  without  its  lessons. 

The  ichneumon  fly  is  parasitic  in  the  living  bodies  of 
caterpillars  and  the  larvae  of  other  insects.  With  cruel 
cunning  and  ingenuity  surpassed  only  by  man,  this 
depraved  and  unprincipled  insect  perforates  the  strug- 
gling caterpillar,  and  deposits  her  eggs  in  the  living, 
writhing  body  of  her  victim.  Eruptions  appear  on 
the  surface  of  the  unfortunate  worm,  and  in  due 
course  of  time  the  atrocious  brood  is  hatched.  With 
the  refinement  of  innate  cruelty,  these  parasites  eat 
their  way  into  the  living  substance  of  their  unwilling 
but  helpless  host,  avoiding  all  the  vital  parts  to  pro- 
long the  agony  of  a  lingering  death.  The  worm  is 
their  "capital"  and  they  are  taking  their  "income." 
They  are  consuming  the  "  interest"  and  "saving"  up 
the  "principal."  The  toil  and  suffering  of  saving  is 
entirely  vicarious — the  worm  does  that.  We  might, 
did  we  possess  the  eloquence  of  a  Bastiat,  go  into 
ecstacies  over  the   glorious  "harmonies"  of  nature's 


PARASITIC  WEALTH  1 63 

economic  methods !  But  what  about  the  worm  ? 
Nature's  malevolence  may  be  beneficial  to  man,  but 
how  about  the  worm  ?  Is  there  no  redress  for  the 
poor  worm  ?  No ;  he  must  bear  the  invasion  with 
good  gracQ,  for  should  he  presume  to  complain  about 
the  social  " harmonies", the  "parasites"  would  straight- 
way turn  upon  him  and  denounce  him  as  an  "agita- 
tor"— perhaps  call  him  a  "socialist"  or  some  other 
disagreeable  name.  And  as  to  the  eviction  of  these 
unwelcome  tenants,  who  could  be  so  shockingly 
heartless  as  to  propose  such  an  outrageous  measure  ! 
The  presumption  !  Is  it  not  their  inheritance,  and  have 
they  not  the  right  of  possession? 

Such  appear  to  be  the  arguments  of  the  parasitically 
rich  and  of  their  parasitic  supporters. 

People  of  America !  Will  you  tolerate  this  state  of 
things  any  longer?  Will  you  see  the  continued  per- 
petration of  a  great  social  wrong  and  remain  the 
passive  victims  of  it  ?  Delays  are  dangerous,  the  power 
of  aggregated  wealth  grows  apace  and  is  becoming 
more  aggressive  as  it  grows  stronger.  Further  deg- 
radation and  enslavement  of  the  masses  can  be  the 
only  outcome. 

Even  now  strong  repressive  measures  are  invoked 
to  keep  down  social  uprisings  and  discontent.  Only 
"strong"    governments    can     successfully     maintain 


164  PARASITIC  WEALTH 

^' order"  in  a  society  where  Labor  is  forcibily  "held 
up''  and  fleeced  by  its  refined  economic  methods. 

Already  the  staunch  supporters  of  Monarchy,  taunt- 
ingly point,  in  vindication  of  "strong  government" 
theories,  to  our  social  and  political  corruptions,  and 
watch  with  secret  joy  the  forces  of  disintegration  which 
are  slowly  but  surely  hastening  our  downfall. 

The  menace  to  our  liberties   is   this  unjust   wealth 
accumulation.      No  republic  can   long  withstand   the 
subtle  influence  of  a  corrupt  plutocracy.     This  wealth 
rightfully  belongs  to  the  people  and  its  unjust  appro- 
priation is  a  usurpation  of  power  which  must  logically 
lead  to  despotism   and  ultimate  national   decadence. 
Other  great   nations   have   succumbed   to  these  very 
influences,  and  from  the  sepulchres  of  the  past,   their 
buried  civilizations  appeal  to  us   in   mute   eloquence, 
and  bid  us  beware  of  their   untimely   fate.       But  we 
have  our  warnings.    Already  the  rights  of  free  speech 
and  protests  of  labor  have    been    judicially  assailed. 
Even  now   over-zealous  partisans   of  strong  govern- 
ment measures,  would  lead  to  overt  acts  of  oppression 
and  repression,  and  an  unscrupulous  and   mendacious 
press  has  voiced  the  sentiments.      Thousand  and  one 
silent    influences  are  at  work  slowly   and  impercept- 
ably  leading  to  greater  arrogation    of   power  by  the 
rich  and  to  the   gradual  abridgment  of  the  people's 
liberties. 


PARASITIC  WEALTH  165 

Shall  we  stem  the  tide  that  is  bearing  us  on  to 
national  destruction  ?  Let  every  man  who  has  the 
welfare  of  mankind  at  heart,  who  loves  his  country 
and  values  liberty — who  believes  in  justice  and  fair 
play,  and  desires  a  peaceful  solution  of  our  social  woes, 
put  his  heart  and  soul  into  the  cause  of  righting  these 
iniquities.  Let  him  assume  the  sacred  duties  of 
citizenship  and  vote  for  a  reform. 

The  money  power  is  formidable — vested  rights  and 
interests  are  powerful.  The  social  parasites  will  be 
up  in  arms  and  fight  for  their  very  life,  for  all  the 
"incomes"  of  the  rich  are  menaced.  All  institutions 
which  idly  thrive  at  the  expense  of  industry  will  be 
arra3-ed against  us;  even  churches  and  "endowed" 
colleges  depending  on  "annuities"  have  common  inter- 
ests with  parasitic  capital.  A  powerful  press  in  the 
service  of  present  interests  will  wage  war  to  the 
death. 

Shall  we  crush  the  money  power  or  shall  it  crush 
us?  We  must  face  the  foes  of  social  justice  at  the 
polls  in  overwhelming  numbers  and  forever  efface  the 
crime  of  centuries!  Over  ninety-five  per  cent. of  the 
people  are  wTonged  by  existing  conditions  and  nothing 
but  apathy  and  political  indifference  will  put  off  reform 
so  long  deferred. 

The  principles  we  have  enunciated  may  be  con- 
densed into  a  political  creed  as  follows ; 


1 66  PARASITIC  WEALTH 

I.  Land  emancipation  by  purchase;  present  hold- 
ers of  land  to  receive  certificates  to  the  full  appraised 
value  of  their  holdings.  The  nationalization  by  pur- 
chase, of  railroads,  waterways  and  telegraphs  by  the 
issue  of  similar  certificates. 

The  Government  of  the  United  States  to  declare 
these  certificates  to  be  the  lawful   and  constitutional 

money  of  the  nation. 

3.  The  value  of  the  money  to  be  regulated  by 
the  land  tax  rate  on  a  uniform  per  capita  assess- 
ment basis. 

4.  The  volume  of  the  money  to  be  maintained  on 
a  uniform  per  capita  basis  and  to  be  of  such  amplitude 
as  to  make  it  premiumless. 

Gold  and  other  mone3'-metals  to  be  demonetized. 
All  coin  money  and  paper  obligations  to  be  redeemed 
into  lawful  money. 

6.  The  organization  of  national  Mercantile  and 
Savings  banks,  and  the  establishment  of  a  bank  ser- 
vice charge. 

7.  The  repeal  of  all  tariffs,  excise  and  internal 
revenue  laws  and  all  other  taxes  and  the  substitution 
therefor  of  the  land  tax. 

8.  Maintenance  of  a  public  improvement  fund. 
The  establishment  of  a  perpetual  employment  oppor- 
tunity for  overflow  labor  seeking  occupation,  and  the 
fixing  of  a  lowest  standard  rate  of  pay  for  labor  pas- 
sing a  certain  prescribed  test  of  fitness. 

9.  The  passing  of  such  constitutional  measures  or 
[imendments  as  will  place  all   public  service    out  of 


PARASITIC  WEALTH  1 67 

the  reach  of  partisan  influence  or  interference  on  any 
pretext  but  that  of  greater  efficiency  and  economy  of 
service. 

10.     Selective  immigration. 

Shall  we  proceed  at  once  to  organize  the  forces  of 
reform,  or  shall  we  temporize  and  wait  until  the  mis- 
eries of  another  industrial  and  business  collapse  drive 
the  socially  wronged  to  desperation  and  revolt.'^ 

We  are  now  entering  upon  a  period  of  so-called 
••prosperity.''  The  monopoly  guarded  opportunities 
are  once  more  opening  up  to  anxious  and  expectant 
labor,  starved  into  unconditional  submission  by  en- 
forced idleness.  For  the  privilege  of  this  "prosperity" 
labor  will  continue  to  pay  the  usual  33  per  cent,  com- 
mission to  capital  and  the  tariff  monopolies,  but  it 
will  gladly  pa}'  the  tribute,  if  only  permitted  to  earn. 

Were  an  attempt  made  to  openly  rob  labor  of  33 
per  cent,  of  its  earnings  on  some  economical  pretext, 
the  people  would  immediately  rise  in  their  might  and 
crush  the  taxing  power  out  of  existence,  but  by  the 
subtle  and  insidious  methods  of  economic  absorption, 
parasitic  wealth  takes  its  toll  out  of  labor's  earnings 
before  the  worker's  pay  is  considered,  and  so  the 
stealage  is  not  even  suspected. 

Can  we  bring  the  people  to  a  realization  of  these 
great  wrongs? 


1 68  PARASITIC    WEALTH 

Between  the  apprehension  of  a  social  wrong  and 
the  tardy  righting  of  it,  there  are  for  the  reformer, 
many  stages  of  bitter  disappointment,  vexation  and 
trial.  The  obstacles  are  many,  the  inertia  to  change 
great,  and  the  resistance  obstinate.  Look  what  it  cost 
to  break  the  chains  of  chattel  slavery  in  this  country ! 
Will  the  emancipation  of  the  industrial  slave  be  as 
stubbornly  contested  ?  Yes,  we  may  expect  opposition 
which  for  rancour  and  malevolence  will  find  no  parallel 
in  history.  The  rotten  foundations  of  a  thoroughly 
corrupt  and  dishonest  civilization  are  threatened.  The 
props  of  privilege  and  despotism  are  menaced.  We 
must  prepare  for  a  long  and  desperate  struggle  with  a 
powerful  and  unscrupulous  foe.  Fortunately  there 
need  be  no  violence.  The  social  dry-rot  and  political 
corruption  have  not  yet  deprived  us  of  our  franchise ; 
we  may  organize  and  vote,  and  if  we  suffer  social  in- 
justice to  continue,  it  will  be  our  own  fault. 

The  appeal  goes  forth  to  ministers  of  religion  in 
the  name  of  morality  and  righteousness — to  journalists, 
publicists  and  writers  in  the  name  of  justice  and  fair- 
play — to  all  men  in  the  name  of  humanity,  to  join  in 
the  righting  of  these  wrongs. 

The  appeal  goes  forth  to  every  political  sect  and 
social  reform  party  without  distinction  of  creed — to 
every  industrial  and  trade  organization    of    whatever 


PARASITIC  WEALTH 

following,  to  sink  their  differences  and  successfully 
unite  for  the  common  good  on  the  lines  and  principles 
herein  set  forth.  Heretofore  the  social  forces  have 
been  more  or  less  at  variance  and  working  at  cross- 
purposes  for  want  of  a  definite  economic  principle  on 
which  all  could  unite  and  agree.  That  pri^nciple  has 
now  been  proclaimed  and  a  definite  policy  formulatet-. 
The  opportune  moment  for  concerted  action  is  at 
hand.  Let  all  unite  in  one  grand  protest  against  the 
iniquities  of  the  present  social  maladjustments  and 
forever  crush  the  money  power. 

If  the  movement  have  in  it  the  inspiration  of  truth 
and  justice,  it  will  sweep  the  country  like  a  mighty 
tidal  wave  and  cany  everything  before  it.  The  time 
is  ripe  and  the  goal  is  in  sight,  but  we  need  men,  we 
need  leaders,  we  need  organization.  Who  will  lead 
us  out  of  the  Industrial  Bondage  ? 

Workers :  Industrial  deliverance  and  social  eleva- 
tion are  within  your  reach.  You  have  the  power,  if 
you  but  use  it,  to  be  the  masters  of  your  own  desti- 
nies. 

Unite !  Organize !  Vote ! 

FINIS. 


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